Write a short note on: Historical review of Micro Economics.

Historical review of Micro Economics.

Micro economics is a traditional approach and its origin can be traced back to the era of classical economist. It was founded by Adam Smith, also known as “The father of Economics”.

In his book “Wealth of Nations” published in 1776, he discussed how prices of individual commodities and the factors of production are determined. He said that if the government doesn’t tamper with the economy, a nation’s resources can be used efficiently.

Micro economic analysis was developed and popularized by the neo classical economist Dr. Alfred Marshall. He is regarded as the real architect of Micro economics. His book “Principles of Economics”, published in 1890 is based on Micro economic approach. Marshall proposed an idea of study of specific, individual markets and firms, as a means of understanding the dynamics of economics.

The marginalism principle used by him became an important and indispensable tool of micro analysis.  Micro economics approach can also be found in the writings of David Ricardo and J.S. Mill.  Some other economists who participated in the development of Micro Economics are  J. R. Hicks, Prof. Samuelson, Prof. Pigou, Chamberlin, Mrs. Joan Robinson etc.

Give reasons or explain: Price theory is useful to businessmen.

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