What are the key differences between micro and macroeconomics and how do they interrelate?

Before diving into the topic and explore the multifarious differences and nuances between microeconomic and macroeconomic systems, lets first start by simply defining what they are.

Microeconomics is the study of individual businesses and firms in a market or an economy. These firms might be on the public or private sector. On the other hand, macroeconomics is the study of an economy as a whole and is a much broader level. It studies how the Gross Domestic Product of a country can increase or decrease and analyses many of the possible outcomes of a change in real GDP in an economy.

However, ff you were going to ask me whether I find micro or macroeconomics easier, I would not be able to give you an answer.

The reason being that there lie key differences between the two (or at least in the IB economics course). In my opinion, I think that microeconomics is harder to understand conceptually. Meaning that the concepts evoked in microeconomics such as market failure, price elasticities and much more might be harder to grasp than macroeconomic concepts.

However, macroeconomics is an economic system that interrelated much more than microeconomics. This implies that the study of macroeconomic systems will require a lot of critical thinking and developed evaluation points. You will be required, as an IB student to think outside the box and to explain what consequences might arise from lets say a demand-side policy.

Both the study of micro and macroeconomics are interconnected in the sense that understanding one to a far level will allow you to understand the other far better. There are concepts that link with each other such as welfare losses and a key concept of allocative efficiency which you will find throughout all units of the DP economics course (whether at standard or higher level).

Therefore, it you take the DP economics course (which I highly suggest), don’t forget to learn the theory and practise as economics is a very complex and versatile subject which requires a lot of focus and consistency.