Economics is the study of how unlimited wants can be satisfied with scarce recourses. Economics is a branch of social science that deals with production consumption and transfer of wealth. The term economics is derived from an ancient Greek word “oikonomia” which means management of household. Oikos means house and nomos means law or custom that means rules of house hold. 1776 is considered the year of Economics as a separate field of study, when The Wealth of Nations was published by Adam Smith, a Scottish social philosopher. There are two broad subfields of economics micro economics and macro economics. Micro means small and microeconomics deals with the smaller parts of economics such as economic condition of an individual or a firms, demand and supply of any individual firms or household, price of a specific products etc. Macro means big or large, and deals with large part of economics such as aggregated demand and supply, inflation, interest rates, economic growth and unemployment etc. If income of a household is the subject matter of microeconomics then national income will be the subject matter of Macroeconomics. Though both Microeconomics and Macroeconomics are the parts of economics they have some differences and they hay related to each other as well.

Literature review and Discussion:

Micro economics is the study of individual unites. It is a branch of economics that study how household decisions are made to allocate scarce resource. On the other hand macro economics study of economy as a whole. It is a study of economic aggregates. There are many differences between these two parts of economics. They differ in their Nature, Scope, Purpose, Need objective, Instrument and Analysis. “Microeconomics is concerned with the universal problem of scarcity while deals with the economy as a whole” (A. T. Clement and H. Keith, 2008, pp 18). Microeconomics is a study of scarcity and choice, which deals with the decision making problems of what to produce, how to produce, for whom to produce and who will choose that what to produce business firms and households and the policies taken by the government for these unites. While individual firms and house hold decisions are not the matter of concern of Macroeconomics. It solves the problems of national income, unemployment, output, input, export-import, GDP, inflation, government budget deficits etc.

Micro economics deals with normal demand and supply, demand is the want of having some thing, ability to pay for it and have the willingness to pay for it and supply is the quantity of a product that a producer wants to sell at a given price. On the other hand macro economics deals with Aggregate Demand and Aggregate supply

The total amount of goods and services demanded in the countries economy at a given overall price level within a given time period. Aggregate demand in macroeconomics is the demand for the gross domestic product (GDP) of a country, and Aggregate Demand is represented the formula: