Economics is a social science which studies economic behaviour of the people.

Ec onomic behaviour meanshow a man is earning income & how he is spending income fo r the satisfaction of wants. Thus, wantssatisfaction through earning & spending is the main subject matter of economics.There are two branches of Modern Economi cs. These two branches are Micro Economics and MacroEconomics. These two terms w ere first coined by Prof. Ragnar Frisch in 1933. FATHER OF ECONOMICSAdam Smith OMTEX CLASSES ECONOMICS Successfully stepping into 7 th year in order to achieve once again success 3 Q1. WHAT IS MICRO ECONOMICS? EXPLAIN ABOUT ITS FEATURES?Meaning : The term Micro Economics is derived from the Greek work ? Mikros ? which means ? Small ? .Micro economics gives a detailed analysis of one part of the economy or society . It studies the behaviour of individual units of the economy, such as household s, firms, industries and markets. Micro economics isconcerned with the study of behaviour if individual element(s) of an economy, whereas, macro economiesconcer ned with the study of behaviours of an economy as whole. Definition: - Micro-economics gives a microscopic picture of the economy. The activities of numerouseconomic units and their inter-relationship are studied and analysed min utely through this method. Definedby ( Maurice Dobb ) F EATURES OF M ICRO ECONOMICS 1. Study of Individual Unit : - Micro economics is concerned with the study of economic behaviour of individ ual units like households, firms, industries and markets. In other words, it mak es microscopic orin-depth study of individual economic units and no the whole ec onomic units. 2. Microscopic approach : - Micro Economics takes a microscopic view of the economy to study how itworks , i.e. it studies the function of the economy in terms of behaviour of the indiv idual consumers,producers, firms, markets and industries. This approach is also known as slicing method, since it splitsthe whole economy into smaller units for the purpose of intensive study. 3.

Price Theory : - Micro economics analyses how the prices of individual commodities and servic es aredetermined. It also explains how millions of producers and consumers take decision regarding allocationof resources. 4. Partial equilibrium analysis : - Micro Economics makes partial equilibrium analysis. Micro economics is based on the assumption =Ceteris paribus (which means =other things being cons tant). 5. Uses Slicing method : - Micro economics uses slicing method for in-depth study of economic units. It divides or slices the economy into smaller units, (such as individual households , individual firms, etc)for the purpose of in-depth study. 6. Vision : - Micro Economics studies in detail about the behaviour of individual economic units it examinethe trees and not the entire forest. 7. Not a study of Aggregates : - Micro Economics is distinct from Macro Economics. In Macro Economicswe are c oncerned with the economy as a whole. In micro economics we are concerned with t he study of Individual units