Microeconomics in Economics

Microeconomics in EconomicsThe word 'microeconomics' consists of two words 'micro' and 'economics'. The word 'micro' is derived from the Greek word 'mikros', meaning 'small'. Thus, microeconomics deals with the analysis of small individual units of an economy such as economic activities of individual consumers, firms and small aggregates or groups of individual unit such as various industries and markets.The fundametal issues of microeconomics are based on individual level of income, expenditure, price, production, consumption, wage, rent, interest, profit and so on. Since, these issues are directly or indirectly related to prices of goods and services; microeconomics is often known as Price Theory in economics. According to K.E. Boulding,"Microeconomics is the study of particular firms, particular households, individual prices, wages, incomes, individual industries, particular commodities."
In other words, in microeconomics we make a microscopic study of the economy. But, it should be remembered that microeconomics doesn't study the economy in its totality. Thus, microeconimics of looking at the economy through a microscope, as it were to see low millions of cells in the economy, the individual as customers and firms producers are functioning in the whole economic organization. Microeconomic theory and seeks to determine the mechanism by which the different economics units attain the position of equilibrium proceeding from the individual units too narrowly defined group.


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