Meaning, Scope, Importance and Limitations of Micro Economics
Meaning, Scope, Importance and Limitations of Micro Economics Micro-Economics: The term ‘Micro’ is derived from the Greek word ‘Mikros’ which means small. The concept of microeconomics was introduced by Ragnar Frisch. Microeconomics studies individual units like individual household, pricing of a firm, wages of a worker, profits of an entrepreneur, etc. According to Maurice Dobb , “Micro-economics is in fact a microscopic study of the economy.” In short, microeconomics is the study of the economic behaviour of individual consumers, firms, and industries and the distribution of production and income among them. In Microeconomics, Economy is divided into various small units and each unit is analysed in detail. It is called slicing method. Scope of Micro Economics: 1. Theory of product pricing, which includes: 1.1 Theory of consumer behaviour: For a consumer point of view, it studies the behaviour of a consumer how he spends his limited income on th...