SUBMITTED BYTERESA BOHARA SUSHILA KHADKASUSAN KOIRALA TRIBHUWAN PANDEY

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SUBMITTED TOGYANMANI ADHIKARI

CONTENTSINTRODUCTION OF MICROECONOMICSIMPORTNCE OF MICROECONOMICSUSES IN BUSINESS DECISION MAKING

1. To understand the operation of an economy2. To provide tools for economic policies3. To examine the condition of economic welfare4. Efficient utilization of resources5. Useful in international trade6. Useful in decision making ; optimal resources allocation Basis for prediction Linear programming Price determination

Importance of microeconomics

To understand the operation of an economy

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Gives us knowledge of free enterprise economy

Helps in making decisions such as how much to produce, what to produce, for whom to produce etc

Explains the conditions of efficiency in both production and consumption

Helps to ascertain the government policies on the resource allocation and pricing

It helps to impose tax rates by analyzing the demand and supply factors

Also helps to examine the implications and effectiveness of the government policies

To provide tools for economic policies

Helps to maximize the social welfare Welfare economics is related to the

maximization of social welfare which is possible only under perfect competition

Helps in formulation of economic policies which are meant for promoting economic welfare and efficiency in production

To examine the conditions of economic welfare

Microeconomics is helpful in efficient

management of available resources of a country

Micro economics is utilized to explain the gains from international trade , balance of payment disequilibrium and determination of foreign exchange rates

It helps to make the rational decisions to both producers and consumers in an economy

Micro economics provides the way of efficient utilization of available resources.

Efficient utilization of resources

Microeconomics helps to determine the gains from international trades by analyzing the relative elasticity of demand for each others products

Helps to determine the rate of foreign exchange by comparative study of demand and supply factors

Useful in international trade

it helps business to achieve maximum production with the given amount of resources

Business firm can make decisions in demand analysis, cost analysis and methods of calculating prices

Useful in business decision making

The limited resources of firms can be optimumly utilized by choosing the best alternative which is possible with the help of microeconomics

Microeconomics also helps producers to select the highly efficient and least cost production technique.

Helps in optimal resource allocations

provides basis for predicting future course of events by analyzing the various factors such as demand and supply etc.

Basis for predictions

It provides the technique of linear programming by which a producer takes the numbers of important decisions

Linear programming also investigates the best possible production process among the alternative production processes to attain the maximum income

Linear programming

It is useful in price determination, known as factor and product pricing.

Prices are determined on the basis of demand and supply forces which are the main part of microeconomics.

Price determination