2. Introduction
Micro Economics Smaller picture-
basic theories
PROF. NAMRATA MEHTA - LNCMT, SURAT. 2
ECONOMICS
Micro Economics basic theories
Macro
Economics
Big picture-
national
economy
3. What is Micro Economics?
The analysis of the decisions made by individuals
and groups, the factors that affect those decisions,
and how those decisions effect others
It considers decisions by both firms and individuals
PROF. NAMRATA MEHTA - LNCMT, SURAT. 3
It considers decisions by both firms and individuals
are motivated by cost and benefit considerations.
Costs can be either in terms of financial costs such
as average fixed costs and total variable costs or
they can be in terms of opportunity costs, which
consider alternatives foregone.
4. Conti..
The general concern of microeconomics is the
efficient allocation of scarce resources between
alternative uses
But more specifically it involves the determination
PROF. NAMRATA MEHTA - LNCMT, SURAT. 4
But more specifically it involves the determination
of price through the optimizing behavior of
economic agents, with consumers maximizing
utility and firms maximizing profit."
5. Need and Significance
Essential for understanding total economic
system
Helpful in- solving of economic problems
Deciding economic policyDeciding economic policy
Economic decision of individual unit
Enquiring about economic welfare
PROF. NAMRATA MEHTA - LNCMT, SURAT. 5
6. Limitation
Study of industrial units only
Unrealistic assumption
Study of a part of economy only
Few specific problems onlyFew specific problems only
Limited study of economic problems
PROF. NAMRATA MEHTA - LNCMT, SURAT. 6
7. What we will learn in this subject?
Basic concepts, types of specialization, globalization ,
money and exchanges
Governments role in economy and business
regulations
Types of markets, wages and incomes, International
trades
Concepts of demand, utility and elasticity, monopoly,
costs of production and product markets
Natural resources, economic inequality and public –
goods and choices
PROF. NAMRATA MEHTA - LNCMT, SURAT. 7
