Micro Economics – Importance and Limitation
Micro – a word which is firstly used
by Ragner Frisch. In micro economics, we include the economic activity at micro
level or unit level or individual level. Micro economic cover all its
financials activities at lower levels. It also analysis them & find out
some meaning-full outcomes. In other words, we can say that it is a study about
“special firm, special family, individual incomes, prices or special goods and
services”.
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| Micro Economics |
ü Micro
economics help us to understand the
micro level basic activity of an economic. It provide a base for economic
because there is no authority to regulate the economy. What to produce, how to
produce, for whom to produce or how to distribute, these basic questions solved
by the consumer and firm at their own level.
ü Many
economic policies formed by
different – 2 tools which is provided by the micro economics. Government
provide lots of facilities like post, train, water etc. The cost is fixed at
break even points for these services.
ü
Micro
is the basic economics. So it helps us to allotment
or relocation of different resources. All our resources are rare and we
must utilize them fully.
ü
It
helps us to understand the current
consumer market and also help to understand the demand and supply factor.
ü
Micro
level is working on ground level so we are able to understand the taxation issue also and their effect.
ü
It
also help us to understand the
international trade like defecates, demands and supply of foreign currency.
ü
With
micro economic, we make & use such a model which helps us for real economic phenomena.
Limitations –
ü
It
assume that economic have a full
employment
ü
It
adopt a laissez faire policy
ü
It
not provide any support for whole
economic picture
