Give reason or explain the following statement:
Micro economic theories based on certain assumptions.
Microeconomic theories are based on certain assumptions.
Ans. Yes, I agree with this statement,
- Micro Economics makes partial equilibrium analysis. Micro economics is based on the assumption ‘Ceteris paribus’ (which means ‘other things being constant).
- Microeconomics also assumes conditions of full employment, pure capitalism, perfect competition, etc. in an economy,
- Thus, we can conclude that the Microeconomic theories are based on certain assumptions.
Concept: Assumption of Micro Economic Analysis
Is there an error in this question or solution?
Video Tutorials For All Subjects
- Assumption of Micro Economic Analysis