According to Kenneth Boulding, “Micro economics is the study of particular firms, particular households, individual prices, wages, incomes, individual industries and particular commodities.”
Scope of Micro economics:
Micro Economic analysis is individualistic in nature. It considers individual constituents such as consumer, firm, producer, individual income, price etc. Its study is mainly confined to price theory and resource allocation. It does not take into account aggregates of economy or national problems such as poverty, unemployment, inequalities of income etc.
Some theories such as fiscal and monetary policies are also beyond the limit of micro economics. We can thus conclude that, the scope of Micro economics is limited.
Explain the subject matter of Micro Economics.
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