Question

Define microeconomics.

Answer 1

1. Microeconomics is the study of the economic actions of individual units say households, firms, or industries.
2. It studies how business firms operate under different market conditions.
3. The combined actions of buyers and sellers determine prices.
   • Microeconomics covers
   • Value theory [product pricing and factor pricing]
   • Theory of economic welfare.

Answer 2

Microeconomics is that branch of economics which studies economic activities of individual economic units, such as a consumer or a producer, industry etc.