The term ‘Micro’ has been derived from the Greek word ‘mikros’ which means ‘small’. Micro economics deals with the study of economic behaviour of small individual economic units such as individual consumer, firm, producer etc. In other words, its approach is individualistic in nature. It splits / divides the whole economy into small individual units and then studies each unit separately in detail. Micro economics is, thus, a microscopic study of the economy. It is also known as price theory.
According to Kenneth Boulding, “Micro economics is the study of particular firms, particular households, individual prices, wages, incomes, individual industries and particular commodities.”
The above definition intends to explain that micro economics is a study of economic activities of households as a consumption units, individual firms and industries as a production units and individual prices, wages, incomes and their determination.
According to Maurice Dobb, “Micro economics is in fact a microscopic study of the economy.”
The above definition intends to explain that in micro economics, each individual unit is separately examined and analyzed in detail