Microeconomic principles are theoretically sound, practically unrealistic, but conceptually very important

Microeconomic Principles are Theoretically Sound, Practically Unrealistic, but Conceptually Very Important
[Name of the Writer]
[Name of the Institution]
[Subject]
[Date]
Microeconomic Principles are Theoretically Sound, Practically Unrealistic, but Conceptually Very Important
Introduction
As per the customary beliefs, theories and principles are the carriers of knowledge regarding the actual world and they chiefly target the systems. However, no theory, whether economic, physical or any other science, is absolutely correct. Its usefulness and validity depend on whether or not it succeeds in explaining and predicting the set of phenomena that it is intended to explain and predict. According to this objective, the theories are continuously tested by means of observation. As a result of this testing, they are often modified or refined and occasionally discarded. This particular paper interprets the statement that microeconomic principles are theoretically sound, practically unrealistic, but conceptually very important as well as evaluating its validity.
Discussion
It is often argued that the principles of microeconomics are theoretically sound, but not been successful in practical, even in terms of their own criteria of delivering understanding as well as explanations of the economic systems of the real world. Critics argue that the economists have converted the microeconomics principles into types of social mathematics where the main emphasis is on the analytical rigor while there is no practical relevance of those principles. One of the major shortcoming associated with microeconomics is its incapacity to establish an empirical correction that links the models as well as the theories with the actual world in which all the management decisions takes place. Therefore, it is essential to replace the fundamental methodology and theory that shape the microeconomic principles. The majority of the models in the field of science have no significant resemblance to the crucial characteristics of the actual economics. This is primarily because the microeconomic principles are grounded on the unrealistic assumptions; thereby making the theories difficult to confront with the reality.
Nevertheless, the philosophers as well as methodologists who contend that the theorizing and modelling in economics should be lensed with a less demanding view. However, given that all. The microeconomic models are built on unrealistic assumptions, deductive validity cannot ascertain wide-ranging veracity regarding the target system. Furthermore, the capacity of the microeconomic models to model the credible world or the world close to the reality cannot be compared with the ability of investigating the actual world. Within microeconomics, the decisions of productions and consumers are described as the selections made by the single agents. Along these lines, Baumol& Blinder, (2015) argued that an inadequate idealization is typically introduced by the agent models. Furthermore, the representative agent is compelled to follow the rule of price taking as well as perfect competition that has been justified on idealizing suppositions. However, the question that prevails in such situation is that with whom does the representative agent trad...