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  Microeconomic Theory and its Methodologies

Microeconomic Theory:

Economics is the subject which deals with the study of human being in the common business of life. The subject enquires how an individual obtains his earnings and how he uses it. Thus, it is on the one side, it is the study of prosperity and on the other and more important side, a part of the study of human beings.

Macroeconomics: Macro as the term suggests means large. Macroeconomics is a division of economics which majorly deals with the structure, performance, and behavior of a national or regional economy as a whole.

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.

Methodologies:

A) Economic Model: Assumptions as well as Propositions
B) Deductive Method (Theory) v/s Inductive Method (Empirical Studies)
C) Positive v/s Normative Economics

Rationality: Economic agents utilize rational means to achieve their goals.
cf) bounded rationality

Optimization Problem:

A) Minimization v/s Maximization
B) Maximize profit by minimum amount of inputs? No way!
C) Duality problem

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