Introduction

Microeconomics studies individual economic agents and individual markets—for example, consumers choosing what to buy and producers deciding what to produce and at what price. Its focus is on particular buyers, sellers, firms, and markets, and it usually assumes the rest of the economy remains unchanged.

Macroeconomics studies the economy as a whole. It deals with aggregate variables such as total output, general price level, employment, interest rate, wages, profits, inflation, and unemployment. It also studies the interdependence among different sectors of the economy and the policies that affect the economy as a whole.

So, the main difference is:
- Microeconomics: the study of individual units and markets.
- Macroeconomics: the study of aggregate economic variables and the whole economy.

The important features of a capitalist economy are:

1. Private ownership of means of production — land, capital, and other productive assets are mainly privately owned.
2. Production for the market — goods and services are produced mainly to be sold in the market.
3. Wage labour — labour services are bought and sold for a price called the wage rate.

In such an economy, entrepreneurs control production, hire labour, use capital and land, and sell output for profit. Profits may be used later as investment expenditure to expand production.