This document provides an introduction to microeconomics. It defines microeconomics as the study of individual economic decision-makers and markets. Microeconomics analyzes how households and firms make choices and how they interact in markets. It examines supply and demand at the individual level and studies pricing and output decisions by producers. The document also outlines different types of microeconomics including microstatic, comparative microstatic, and microdynamics and discusses some common uses of microeconomic analysis.

1. INTRODUCTION TO
MICROECONOMICS
By Satya Prakash Joshi

2. WHAT IS ECONOMICS?
• The study of how individual and society choose to
utilize scare resources to satisfy unlimited human
wants.
• These wants encompass all goods and services that
individual desire, including food clothing, shelter
and anything else that enhance the quality of life.

3. WHAT IS MICROECONOMICS?
• The term micro has been derived from Greek word “mikros”,
which means small.
• Microeconomics is the study of the economy at the level of
the individual.
• It also analyze the behavior of individual household,
industries, markets, labor unions or trade associations.

4. INTRODUCTION CONTINUE…
• According to K.E Boulding, “ Microeconomics is the study of
particular firms particular household, individual prices,
wages, incomes, individual industries, particular
commodities.
• Since microeconomics splits up the entire economy into
smaller parts for the purpose of intensive study, it is also
known as “Slicing Method”

5. FEATURES OF MICROECONOMICS
• It is individualistic economics
• It is concerned with the behavior of individual economics entities such
as household, firms, market etc.
• It analyses economics phenomena under the ceteris paribus
assumption and hence is a method of partial equilibrium analysis.
• It is also called “price theory” or “value theory”
• It’s objective is to analyze the process by which scare resources are
allocated among alternative uses.

6. SCOPE OF MICROECONOMICS
• Theory of demand
• Theory of production
• Theory of product pricing
• Theory of factor pricing
• Theory of economics welfare

7. TYPES OF MICROECONOMICS
• Micro Static
• Comparative Micro Static
• Micro Dynamic

8. MICRO STATIC
• Micro static is the study of static
relationship between different
microeconomic variables.
• It deals with the final position of the
equilibrium of these variables at
particular point of time.
• i.e micro static analyses the
condition of equilibrium price of a
commodity at a particular point of
Y
X
S
S
D
D
0 Q
P
Price
Quantity
E

9. COMPARATIVE MICRO STATIC
• Is concerned with a comparative
study of different equilibrium
positions at different points of
time.
• It does not deals with the
transitional period involved in
the movement from one
equilibrium position to the other.
Y
X
S
S
D
D
0 Q
P
Price
Quantity
E
E1
P1
D1
D1
Q1

10. MICRO DYNAMICS
• Micro dynamics analyses the
process by which the system
moves from one equilibrium
point to another.
• It explains the happening in
the market during the period
of transitions from one
equilibrium point to another.
Y
X
S
S
D
D
0 Q
P
Price
Quantity
E
E1
P1
D1
D1
Q1

11. USAGES OF MICROECONOMICS
• Helpful to understand the working of the economy
• Helpful to provide tools for economics policies
• Helpful in formulating sectorial policies
• Helpful in efficient allocation of resources
• Helpful in the study of human behavior
• Helpful in business decisions
• Optimal resource allocation, Demand analysis, Cost Analysis,
Pricing policy, Optimal production decision