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Write the limitations of microeconomics.

Appropriate discussion does not mean that the importance of microeconomics is unlimited. The truth is that the usefulness of microeconomics is limited to only a few areas.

Write the limitations of microeconomics
  1. Microeconomics does not give a picture of the working and state of the economy as a whole. As Prof. Boarding put it, “It is impossible to describe a vast and complex set of facts, in terms of individual items, like the economic method”.
  2. The conclusions obtained from microeconomic analysis do not apply to the entire economy.
  3. This discussion is based on unrealistic assumptions like full employment, pre-competition. So when the basic assumptions are wrong then how can one expect the right conclusions.
  4. This analysis is completely useless for the study and solution of some economic problems. For example, solutions to the problems of revenue, international trade, foreign exchange, banking etc. cannot be obtained by this analysis.

Despite these limitations, microeconomics has a special place in economic analysis, which cannot be expected.

Difference between micro and macro economics

  1. Micro economics studies small or individual units, Jat’s broad economics studies the sum of units i.e. national totals.
  2. Macroeconomics studies the economy as a whole, whereas microeconomics deals with a part of the economy.
  3. Comprehensive economics is the act of summarizing, whereas microeconomics is the act of breaking the sum into pieces.
  4. The basis of microeconomics has remained other things same, whereas the basis of macroeconomics is general analysis.
  5. Microeconomics considers the distribution of employment, output and income to be variable among different sectors of the economy, whereas macroeconomics considers them to be constant.

1. Write one limitation of microeconomics.

The conclusions obtained from microeconomic analysis do not apply to the entire economy.

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