Microeconomics is useful in explaining and determining the rate of foreign exchange between currencies, fixing international trade and tariff rules, defining the cause of disequilibrium in the balance of payment (BOP), and formulating policies to minimize it. Under its principles of production like the law of returns to scale, cost of production, and the optimum combination of factors are studied. Under its principles of production like the law of returns to scale, cost of production, and the optimum... 3. The scope or the subject matter of microeconomics is concerned with: Commodity pricing. Consumption. Macroeconomics: Definitions, Features, Scope, Importance (Step-by-Step), 5 Main Stages of Business Cycle with Diagram (With Examples), 10 Important Objectives of Demand Forecasting (With Examples), 8 Main Properties of Indifference Curve with Diagram (With Examples), 8 Major Steps of the Decision Making Process in Business (With Examples), 12 Methods to Correct Disequilibrium in Balance of Payments (Step-by-Step), 15 Importance and Limitations of Microeconomics (Explained), 9 Methods of Measuring Employee Morale in Organization, 12 Key Factors that Affecting Employee Morale in Organization, 18 Ways to Build Up Employee Morale in Workplace, 11 Indicators of Low Morale in the Workplace, 9 Effective Manager Steps in Handling Employee Grievances, 22 Key Advantages and Disadvantages of Privatization, 12 Methods to Correct Disequilibrium in Balance of Payments (BOP) – Step-by-Step, 19 Essential Elements of Good and Effective Planning, 17 Major Problems of Public Sector in Economy, 10 Difference and Similarity between Innovation and Creativity, 18 Major Advantages and Disadvantages of Supermarkets, 11 Advantages and Disadvantages of Functional Organizational Structure, 10 Objectives of Entrepreneurial Development Programmes, 14 Principles of Planning in Management (With Examples), How to Become a Successful Salesman? Microeconomics helps in determining the factor prices for land, labor, capital, and entrepreneurship in the form of rent, wage, interest, and profit respectively. eval(ez_write_tag([[250,250],'googlesir_com-large-mobile-banner-1','ezslot_13',124,'0','0']));eval(ez_write_tag([[250,250],'googlesir_com-large-mobile-banner-1','ezslot_14',124,'0','1']));Following are the Characteristics: Under it, the study of particular units and economic behavior of the group is done. Theory of production and costs Land, labor, capital, and entrepreneurship are the factors that contribute to the production process. Tags . Related: 5 Main Stages of Business Cycle with Diagram (With Examples). So, general prices are not studied under it. This type of microeconomic analysis explains the process of change between initial or original equilibrium and a new equilibrium. Scope of Microeconomics Theory of demand Theory of production and costs Theory of product pricing Theory of factor pricing Theory of economic welfare Microeconomics explains the operating of a free market economy where, an individual producer has the freedom to take economic decisions like what to produce, how to produce, or for whom to produce. Scope Of Microeconomics : Microeconomics helps us to study two aspects relating to the (a) allocation of resources for the production of good’s and services, (b) Efficient distribution of goods. Following are the scope and subject matter of microeconomics: Under its principles of consumption like the law of diminishing marginal utility, the law of equal marginal utility, the law of demand, the elasticity of demand, consumer surplus, indifference curve and studied.

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