Question

Give reasons or explain the following statement.
Marginalism principle is used as a tool of analysis in Micro Economics.

Answer 1

Micro Economics uses Marginalism principle as a tool of analysis. 'Marginal' means change brought about in total by an additional unit. All micro decisions are taken at margin. Marginal principle forms the base of Micro Economic theories like law of Diminishing Marginal Utility, law of Equi-marginal utility, Demand analysis etc.