MICROECONOMICS

Introduction

The term 'Micro' in English language means 'small'. Therefore, Micro economics study the economic problems at the level of an individual (an individual firm, an individual household, or an individual consumer.

Definition
According to Professor Boulding, “ Microeconomics is the study of particular firm, particular household, Individual price, wage , income, industry and particular commodity.”

Scope of Microeconomics
1)      Theory of Demand
2)      Theory of Production
3)      Theory of Price Determination
4)      Theory of Factor Pricing

Difference between Microeconomics and Macroeconomics

Microeconomics
Macroeconomics
1) Microeconomics studies economic problems at the individual level
1) Macroeconomics studies economic problems at the level of the economy as a whole.
2) It is basically concerned with determination of output and price for an individual firm or industry. So, it is briefly referred as the Theory of price.
2) It is basically concerned with determination of aggregate output and general price level in the economy as a whole. So, it is briefly referred as Theory of Income and Employment.
3) Market mechanism plays a significant role in the context of microeconomics problems such as problem of product or factor pricing.
3) Government plays a significant role in the context of macroeconomic problems like the problems of unemployment, poverty and inflation.


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