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Need for Trade and Transactions

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Give reasons.
Micro economic theories are based on certain assumptions.

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Solution

Microeconomic theories are based on assumptions like "ceterius paribus", which means "other things being constant" because it deals with partial equilibrium analysis. Partial equilibrium analysis studies the effect of one variable upon the other without considering the effect of other factors.

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Similar questions

Q. Give reasons or explain the following statements.

1) Micro Economics is also known as price theory.

2) Micro Economics studies individual economic unit.

3) Micro Economics analyses partial equilibrium.

4) Micro Economic theories are based on certain assumptions.

5) Marginalism principle is used as a tool of analysis in micro economics.

Q. Define or Explain the Concepts.
Micro economic theories are based on certain assumptions.

Q. Most of the ________ economic theories are based on certain assumptions.

Q. Give Reasons or explain the following statements.
Macro Economics is different from Micro Economics. Or Macro Economics is wider than Micro Economics.

Planning is based on certain assumptions about the future. What are these assumptions called?

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