Question

Which of the following is a limitation of microeconomics?

Options

• It helps in formulating government policies.

• Microeconomics fails to explain the functioning of an economy as a whole.

• It cannot explain unemployment, poverty, illiteracy, and other problems prevailing in the country.

• Both Microeconomics fails to explain the functioning of an economy as a whole and They cannot explain unemployment, poverty, illiteracy, and other problems prevailing in the country.

Answer 1

Both Microeconomics fails to explain the functioning of an economy as a whole and They cannot explain unemployment, poverty, illiteracy, and other problems prevailing in the country.

Explanation:

Microeconomics helps in formulating economic policies which enhance production efficiency and result in greater social welfare. But it has a limitation, Microeconomics fails to explain the functioning of an economy as a whole. It cannot explain unemployment, poverty, illiteracy, and other problems prevailing in the country.