{"id":3751,"date":"2021-07-08T16:11:38","date_gmt":"2021-07-08T10:41:38","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=3751"},"modified":"2025-10-07T14:39:02","modified_gmt":"2025-10-07T09:09:02","slug":"scope-of-microeconomics","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/","title":{"rendered":"Scope of Microeconomics &#8211; Nature and Meaning"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69dbb7ab6df3f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69dbb7ab6df3f\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/#Scope_of_Microeconomics\" >Scope of Microeconomics<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/#Meaning_of_Microeconomics\" >Meaning of Microeconomics<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/#Definitions_of_Microeconomics\" >Definitions of Microeconomics<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/#Scope_of_Microeconomics-2\" >Scope of Microeconomics<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/#Nature_of_Microeconomics\" >Nature of Microeconomics<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/#a_Theory_of_Product_Pricing\" >(a) Theory of Product Pricing :<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/#b_Theory_of_Factor_Pricing\" >(b) Theory of Factor Pricing :<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/#c_Theory_of_Economic_Welfare\" >(c) Theory of Economic Welfare :<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"Scope_of_Microeconomics\"><\/span>Scope of Microeconomics<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Meaning_of_Microeconomics\"><\/span>Meaning of Microeconomics<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Micro means a small part of a thing. Microeconomics thus deals with a small part of the national economy. It studies the economic actions and behaviour of individual units such as an individual consumer, individual producer or a firm, the price of a particular commodity or a factor, etc.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Definitions_of_Microeconomics\"><\/span><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">Definitions of Microeconomics<\/mark><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><strong>1) Maurice Dobb <\/strong>&#8211; \u201cMicroeconomics is in fact a microscopic study of the economy.\u201d<br><br><strong>2) Prof A. P. Lerner<\/strong> &#8211; \u201cMicroeconomics consists of looking at the economy through a microscope, as it were, to see how the millions of cells in the body of economy \u2013 the  individuals or households as consumers and individuals or firms as producers play their part in the working of the whole economic organism.\u201d The following chart gives an idea of the scope of microeconomics.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/microeconomic-definition\/\" target=\"_blank\" rel=\"noreferrer noopener\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/microeconomic-definition\/\"><strong>Microeconomic Definition | Historical Review of Microeconomics<\/strong><\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/scope-of-microeconomics\/\" rel=\"noreferrer noopener\"><strong>Scope Or Nature of Microeconomics<\/strong><\/a><\/li>\n\n\n\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/exceptions-to-the-law-of-diminishing-marginal-utility\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/exceptions-to-the-law-of-diminishing-marginal-utility\/\" rel=\"noreferrer noopener\">Exceptions of Law of Diminishing Marginal Utility<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/criticism-of-law-of-diminishing-marginal-utility\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/criticism-of-law-of-diminishing-marginal-utility\/\" rel=\"noreferrer noopener\">Criticism of Law of Diminishing Marginal Utility<\/a><\/strong><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Scope_of_Microeconomics-2\"><\/span>Scope of Microeconomics<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Nature_of_Microeconomics\"><\/span><strong><span class=\"has-inline-color has-vivid-purple-color\">Nature of Microeconomics<\/span><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"558\" height=\"408\" data-src=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/07\/image-6.png\" alt=\"\" class=\"wp-image-3763 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/07\/image-6.png 558w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2021\/07\/image-6-300x219.png 300w\" data-sizes=\"(max-width: 558px) 100vw, 558px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 558px; --smush-placeholder-aspect-ratio: 558\/408;\" \/><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"a_Theory_of_Product_Pricing\"><\/span><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>(a) Theory of Product Pricing : <\/strong><\/mark><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The price of an individual commodity is determined by the market forces of demand and supply. Microeconomics is concerned with demand analysis i.e. individual consumer behaviour, and supply analysis i.e. individual producer behaviour.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"b_Theory_of_Factor_Pricing\"><\/span><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>(b) Theory of Factor Pricing : <\/strong><\/mark><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In Microeconomics, land, labour, capital and entrepreneur are the factors that contribute to the production process. Microeconomics helps in determining the factor rewards for land, labour, capital, and entrepreneur in the form of rent, wages, interest, and profit respectively.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"c_Theory_of_Economic_Welfare\"><\/span><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>(c) Theory of Economic Welfare : <\/strong><\/mark><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Theory of Welfare basically deals with efficiency in the allocation of resources. Efficiency in the allocation of resources is attained when it results in the maximization of satisfaction of the people. Economic efficiency involves three efficiencies :<br><br><strong>\u2022 Efficiency in production:<\/strong> Efficiency in production means producing a maximum possible amount of goods and services from the given amount of resources.<br><br><strong>\u2022 Efficiency in consumption:<\/strong> Efficiency in consumption means distribution of produced goods and services among the people for consumption in such a way as to maximize total satisfaction of the society.<br><br><strong>\u2022 Overall economic efficiency:<\/strong> It means the production of those goods which are most desired by the people.<\/p>\n\n\n\n<p>Microeconomic theory shows under what conditions these efficiencies are achieved.<\/p>\n\n\n\n<p>Thus, the focus of microeconomics is mainly confined to price theory and resource allocation. It does not study the aggregates relating to the whole economy. This approach does not study national economic problems such as unemployment, poverty, inequality of income etc. Theory of growth, theory of business cycles, monetary and fiscal policies etc. are beyond the limits of microeconomics.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/importance-of-law-of-diminishing-marginal-utility\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/importance-of-law-of-diminishing-marginal-utility\/\" rel=\"noreferrer noopener\">Importance of Law of Diminishing Marginal Utility<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/utility-in-economics-meaning-concepts\/\" target=\"_blank\" rel=\"noreferrer noopener\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/utility-in-economics-meaning-concepts\/\">Utility in Economics ( Concepts of Utility )<\/a><\/strong><\/li>\n\n\n\n<li><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/features-of-utility\/\" target=\"_blank\" rel=\"noreferrer noopener\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/features-of-utility\/\">Features of Utility<\/a><\/strong><\/li>\n\n\n\n<li><a href=\"https:\/\/scholarsclasses.com\/blog\/types-of-utility\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/types-of-utility\/\" rel=\"noreferrer noopener\"><strong>Types of Utility<\/strong><\/a><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/rb.gy\/c9pmbq\" data-type=\"link\" data-id=\"https:\/\/rb.gy\/c9pmbq\" target=\"_blank\" rel=\"noopener\">Issue of Shares<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/rb.gy\/3f7zhl\" data-type=\"link\" data-id=\"https:\/\/rb.gy\/3f7zhl\" target=\"_blank\" rel=\"noopener\">Bills of Exchange<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/rb.gy\/v5flhj\" target=\"_blank\" rel=\"noopener\">Dissolution of Partnership Firm<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/rb.gy\/jpjgd8\" data-type=\"link\" data-id=\"https:\/\/rb.gy\/jpjgd8\" target=\"_blank\" rel=\"noopener\">NPO<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/rb.gy\/nhy2xy\" data-type=\"link\" data-id=\"https:\/\/rb.gy\/nhy2xy\" target=\"_blank\" rel=\"noopener\">Analysis of Financial Statement<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/rb.gy\/nhy2xy\" data-type=\"link\" data-id=\"https:\/\/rb.gy\/nhy2xy\" target=\"_blank\" rel=\"noopener\">Admission of Partner<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":3770,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[1499],"class_list":["post-3751","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-misc","tag-scope-of-microeconomics"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/3751","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=3751"}],"version-history":[{"count":4,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/3751\/revisions"}],"predecessor-version":[{"id":39059,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/3751\/revisions\/39059"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/3770"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=3751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=3751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=3751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}