Give the Importance and use of micro-economics

      

Give the Importance and use of micro-economics

  

Answers


Benjamin
1:Operation of an economy-we get knowledge about operations of an economy from micro economics.It tells us when the units of an economy like consumers and a firm are behaving optimally or not

2:Basic of an economy as a whole-micro economics deals with individuals whereas macro deals with aggregates.Aggregates are as as a result of the sum of individual figures therefore what happens in an economy is derived from micro economics

3:Predictions-principles of micro economics are based on predictions.This predictions are made on some conditions like if there is a fall in demand prices will automatically fall therefore micro economics enables us to predict how the economy will look like in future e.g if demand increases price will automatically increase and these will necessitate more production to control prices and above all to meet the demand

4:Economic policies-are formulated with the help of micro economics.It provides the basis for making economic policies such as introducing a new tax and the reaction towards the same

5:Micro economics is useful in removing difficulties of a particular industry e.g if an individual firm in an industry has challenges the industry is not to be closed down but that individual firm can be examined to identify its challenges before allowing it to join the rest of the firms in the industry that itself enables the industry to perform well
Kalis answered the question on March 20, 2018 at 19:12


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