Theories of microeconomics, Microeconomics

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Theories and Models

?? Microeconomic Analysis

            – Theories are taken in use to describe the observed phenomena in terms of a set of essential rules and hypothesis. For instance

          – The Theory of Consumer Behavior

          – The Theory of the Firm

            – Models:

A mathematical interpretation of a theory utilized to make a forecast.

           – Validate a Theory

The validity of a theory is checked by the quality or value of its prediction, known by the assumptions.

           – Evolving the Theory

Examining and refining theories is essential to the development of the science of economics.


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