Question

Write short notes on :

Features of Micro-Economics

Answer 1

Microeconomics refers to the study of individual economic units such as the consumer and the producer. The following are the features of microeconomics.
i. Individual units - Microeconomics is a study of behaviour of individual units in an economy such as an individual consumer and producer.

ii. Price theory - Microeconomics is also called the price theory, as it helps in determining the prices of both the commodities and factors of production in their respective markets.

iii. Slicing method - Microeconomic analysis adopts the slicing method wherein, the entire economy is divided into various smaller units and then each unit is analysed individually in detail.

iv. Partial equilibrium - Microeconomics uses a partial equilibrium approach. Herein, each of the units is studied in isolation assuming the effect of the other units as constant. It ignores the interdependence among the various units.

v. Microscopic approach - Just as a microscope enables us to see a larger view of smaller things, microeconomics shows a magnified view of an individual unit. It analyses small units in detail. It examines how these individual units perform economic activities and reach equilibrium.