Question

Explain the scope and subject matter of Micro Economics.

Answer 1

1. Commodity Pricing


Prices of individual commodities are determined by market forces of demand and supply. So micro economics makes demand analysis (individual consumer behaviour) and supply analysis (individual producer behaviour).


2. Factor Pricing


Land, labour, capital and entrepreneur, all factors contribute in production process. So they get rewards in the form of rent, wages, interest and profit respectively. Micro economics deals with determination of such rewards i.e. factor prices. So micro economics is also called as 'Price Theory' or 'Value Theory'.


3. Welfare Theory


Micro economics deals with optimum allocation of available resources and maximisation of social welfare. It provides answers for 'What to produce?', 'When to produce?', 'How to produce?' and 'For whom it is to be produced?'. In short, Micro economics guides for utilizing scarce resources of economy to maximize public welfare.

Answer 2

Scope and subject matter of Macroeconomics

The scope of macroeconomics is very widespread subsequent points can be planned under it:

Theory of Income and Employment

In it, the preparation of income and Service level is done and education of consumption, function, speculation, functions, multiple and accelerator is also done.

Theory of General Price Level

In it, the preparation of the general price level is considered and problems connected to price rises, devaluation are a prime subject matter of Macro Economics.

Macro-Theory of Distribution

In macroeconomics learning of Distribution of wages and profits in national income is done. So it is clear that the choice of Macro Economics it’s very extensive.

Hope it helped..............