ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Definition: Microeconomics is the study of individuals, households and firms’ behavior in decision making and allocation of resources. It generally applies to markets of goods and services and deals with individual and economic issues.

Detailed explanation-2: -Microeconomics focuses on the role consumers and businesses play in the economy, with specific attention paid to how these two groups make decisions. These decisions include when a consumer purchases a good and for how much, or how a business determines the price it will charge for its product.

Detailed explanation-3: -Microeconomics studies the decisions of individuals and firms to allocate resources of production, exchange, and consumption. Microeconomics deals with prices and production in single markets and the interaction between different markets but leaves the study of economy-wide aggregates to macroeconomics.

Detailed explanation-4: -Microeconomics has both theoretical and practical importance. It helps in formulating economic policies which enhance productive efficiency and results in greater social welfare. Microeconomics explains the working of a capitalist economy where individual units are free to take their own decision.

Detailed explanation-5: -Macroeconomics examines economy-wide phenomena such as gross domestic product (GDP) and how it is affected by changes in unemployment, national income, rates of growth, and price levels.