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Microeconomics - clause • It implies that the analysis...

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Microeconomics Microeconomics is a static approach in the sense it concentrates on individual behavior in a very short period of time. It analyzes instant changes in behavior. It avoids taking account of long term and external effects on such behavior. Since economic life is highly complex and interdependent, such a simple approach requires the help of strong assumptions. These assumptions are together stated in the form of the ceteris paribus
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Unformatted text preview: clause. • It implies that the analysis operates under the condition "other things are equal or constant or remain unchanged " when individual behavior alters. • Other things include income of the individual, number of members of a family, price of substitutes, taste of a consumer, technical conditions of production, supply of labor, land, capital and other resources, fiscal and monetary policies of the government, etc....
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