State with reasons whether you agree or disagree with the following statement (any three): Theory of welfare economics is studied in micro economics.

Answer: I agree with the statement.

Reasons:

1. Scope of micro economics: Micro economics includes theory of product pricing, theory of factor pricing and theory of economic welfare.
2. Individual welfare: Welfare economics examines how individual consumers and producers maximise satisfaction and how resources are allocated efficiently.
3. Efficiency: It studies efficiency in production, consumption and allocation of resources, which are micro issues.
4. Pareto optimality: Concepts like Pareto optimality are based on individual units and are part of micro analysis.