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  Microeconomics Homework Help

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 Introduction and Importance of Microeconomics

Micro as a term means small. Thus, microeconomics studies individualistic behavior or it studies an individual consumer, producer, household, price of a particular commodity, etc.

According to Prof. K. E. Boulding, "Micro Economics is the study of a firm, particular household, individual prices, incomes, wages, individual industries and particular commodities."

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This is a branch of economics that deals with the market behavior of individual consumers and firms in order to understand the decision-making procedure of firms and households. It considers with the interaction between individual buyers and sellers and the factors that control the choices made by buyers and sellers. In particular, microeconomics majorly focuses on patterns of supply and demand and the determination of price and output in individual markets.

Subject Matter or Scope of Microeconomics

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 Micro Economics is dealing with the following topics:-

  • Commodity Pricing -To determine the prices of individual commodities, forces working are market demand and supply.
  • Factor Pricing -Micro economics is often called as 'Price Theory' or 'Value Theory'. Micro economics purpose is to deal with determination of rewards i.e. factor prices. These rewards are obtained by individuals in the form of wages, rent, interest and profits etc. all factors contribute in production process like land, labour, capital and entrepreneur.
  • Welfare Theory -Microeconomics also deals with optimum utilization of resources and hence maximizes social or public welfare. 
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