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Give Reasons Or Explain the Following Statement. Micro Economic Theories Are Based on Certain Assumptions. - Economics

Short Note

Give reason or explain the following statement.

Micro Economic theories are based on certain assumptions.

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Solution

Microeconomic theories are based on assumptions such as full employment, perfect competition, a laissez-faire style of working (no government intervention) and ceteris paribus. These assumptions help in understanding the relationship between any two variables. However, these assumptions may or may not exist in the real world.

Concept: Assumption of Micro Economic Analysis
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APPEARS IN

Micheal Vaz Economics HSC 12th Standard Maharashtra State Board
Chapter 1 Introduction to Micro Economics
Exercise | Q 2.4 | Page 6
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