Can You Explain The Micro Economics Or Its Theories?

As micro economics the millionth part of any thing. Thus, micro economics is that part of economic theory which deals with the individual units of the economy like consumers, firm and factors of production. Accordingly the body of economic principles dealing with the behavior of economic agents of the economic system like consumer, firm and factors of production is called micro economic theory.Micro economics encompasses the followings.

Price theory: each economic system has to make the decisions regarding what is to be produced how it is to be produced and how the resources to be allocated amongst the different competing uses. All such, under capitalism, is performed with the help of price mechanism those goods will be produced by the producers which maximize their profits; those techniques will be adopted which minimize their costs of production and the resources will be allocated in those uses where the resources command higher prices etc. thus in the micro economics, it deal with the problems of production, consumption, distribution and resources allocation.

Theory of production behavior:
We all know that there are four factors of production like land, labor, capital and entrepreneur. These factors are responsible for productive activities. According to classical economists in short run, the production depends upon the units of labor only while the capital etc is kept fixed. In such state of affairs the total production increases at different rates. This phenomenon is known as law of variables proportions in micro economics theory.