Microeconomics is a branch of economics that studies how individuals, households, firms, and government agencies make decisions to allocate limited resources. Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices; and how prices, in turn, determine supply and demand.
Macroeconomics involves the sum total of economic activity, dealing with the issues of growth, inflation, and unemployment and with national economic policies relating to these issues. Micro economists study aggregated indicators such as GDP, unemployment rates, and price indices to understand how the whole economy functions.
The distinction between microeconomics and macroeconomics can be described in small-scale vs. large-scale or in terms of partial vs. general equilibrium.
Adam Smith
In 1776 Adam Smith published The Wealth of Nations, an enlightened account of political economy written at the dawn of the Industrial Revolution