Write a short note on Features of Micro Economics
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Classical economists always insisted on micro economics because they believed that it is better to understand concept at individual level and then go for general (or macro) level. E.g. first understanding individual consumer behaviour and then analyzing the behaviour of entire market.
1. Nature of Analysis
In micro economics, the behaviour of individual consumers and producers in detail is analysed. It is study of subject matter from particular to general.
2. Method
Micro economics divides the economy into various small units and every unit is analysed in detail. It is a slicing method.
3. Scope
Micro economic analysis involves product pricing, factor pricing and theory of welfare.
4. Application
Both theoretically and practically, micro economics is useful in formulating various policies, resource allocation, public finance, international trade, etc.
5. Nature of Assumptions
Assumption of Ceteris Paribus is always made in every micro economic theory. It means theory is applicable only when 'other things being same'.
1. Nature of Analysis
In micro economics, the behaviour of individual consumers and producers in detail is analysed. It is study of subject matter from particular to general.
2. Method
Micro economics divides the economy into various small units and every unit is analysed in detail. It is a slicing method.
3. Scope
Micro economic analysis involves product pricing, factor pricing and theory of welfare.
4. Application
Both theoretically and practically, micro economics is useful in formulating various policies, resource allocation, public finance, international trade, etc.
5. Nature of Assumptions
Assumption of Ceteris Paribus is always made in every micro economic theory. It means theory is applicable only when 'other things being same'.
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