Micro economics:

Micro is a Latin word which means one millionth part or very small part. Making analysis of individuals in economics is called micro economics.

Example

For example: Discussion of a single tree in whole forest e.g. consumer’s behavior, price mechanism, firm’s behavior, distribution of wealth etc.

The factors which we will discuss in micro economics are as follows:

Consumer’s behavior:

Consumer behavior in market is analyzed that how individuals satisfies their maximum wants with limited resources.

Price mechanism:

In it we discuss how to bring equilibrium between demand and supply of a goods.

Firm’s behavior:

In this part of micro economics we discuss that how a firm can achieve maximum profit.

Distribution of wealth:

In micro economics we also discuss that how money can be distributed among four factors of production e.g. rent, wages, interest, and profit. These all factors are defined as follows:

Rent:

Getting money through a property is called rent.

Wage:

Wage is getting money as a reward on doing some sort of mental or physical work.

Interest:

Interest is charging extra money on loan.

Profit:

Profit is getting more money by investing some wealth in any business.

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