Question

5 Do you agree with the following statements? Give reasons: Microeconomics is a partial equilibrium analysis.
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Answer 1

Answer:

I do not agree with the statement.

Macroeconomics is a general equilibrium analysis which studies an economic phenomenon by taking all the aggregate units in the economy into consideration.

Partial equilibrium is a condition of equilibrium in the theory of Economics which takes into consideration only a part of the market to attain the equilibrium.

Answer 2

Answer:

Microeconomics is based on partial equilibrium analysis. That is, while analysing each of the units/variables the effect of other units is assumed to be constant. In other words, it is based on the assumption of ceteris paribus,To put in a simple words,it analyses each of the units is isolation while ignoring the interdependence among them.Such an analysis is called ad partial equilibrium.