Give reasons or explain the following statements. 2) Micro Economics studies individual economic unit.

Give reasons or explain the following statements.

2) Micro Economics studies individual economic unit.

ANSWER:

Microeconomics is a study that focuses on the behaviour of an individual economic units such as the consumer and the producer. It analyses how consumers make their consumption choices and take decisions, given their incomes and prices of goods and services. Similarly, it analyses how firms decide how much to produce by applying different input combinations. The basic focus of such a study is the determination of prices in the factor and the commodities market.

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