What are the limitations of microeconomics?

Economics Dec 10, 2020

Expert Solution

Limitation of microeconomics

1) It is based on the assumption of full employment in an economy which does not exist in reality. In reality, the economy is underemployment, not full employment.

2) It studies individual behavior not study about the entire economy so microeconomics deal with an individual which creates the difficulty to take the account the entire economic data.

3) There are some economic problem which can not be analyzed such as monetary and fiscal policy, unemployment, inflation etc. Because it is beyond the limit of microeconomics.

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