Question

Explain basic concept of micro economics in 20 lines
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Answer 1

Microeconomics is the study of individuals, households and firms' behavior in decision making and allocation of resources. It generally applies to markets of goods and services and deals with individual and economic issues.

The main key role of Microeconomics is to examine how a company could maximize its production and capacity, so that it could lower prices and better compete in its industry.

.. It is microeconomics that tells us how a free market economy with its millions of consumers and producers work to decide about the allocation of productive resources among the thousands of goods and services.

Answer 2

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➡The two main fields of study in economics are microeconomics and macroeconomics. Now, as you already know, macroeconomics deals with the economy as a whole. Microeconomics, on the other hand, studies the behavior of organizations and individuals. Let us understand a few concepts of Macroeconomics such as Monetary Policy, Input and Output etc.

➡Basic Concepts of Macroeconomics

Microeconomics is the social science that studies the implications of incentives and decisions, specifically about how those affect the utilization and distribution of resources. Microeconomics shows how and why different goods have different values, how individuals and businesses conduct and benefit from efficient production and exchange, and how individuals best coordinate and cooperate with one another. Generally speaking, microeconomics provides a more complete and detailed understanding than macroeconomics.

Microeconomics can be applied in a positive or normative sense. Positive microeconomics describes economic behavior and explains what to expect if certain conditions change. If a manufacturer raises the prices of cars, positive microeconomics says consumers will tend to buy fewer than before. If a major copper mine collapses in South America, the price of copper will tend to increase, because supply is restricted. Positive microeconomics could help an investor see why Apple Inc. stock prices might fall if consumers buy fewer iPhones. Microeconomics could also explain why a higher minimum wage might force The Wendy's Company to hire fewer workers.

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