Principles of Microeconomics

Principles of Microeconomics

Principles of Microeconomics

1. Supply and Demand

Economics may have a reputation as a terrible and lamentable science, but in fact it addresses some of the most fundamental and important problems we face: How to make the best decision by prioritizing, given that resources are scarce and  limited. You can use the tools of microeconomics to decide how best to spend your income; how best to divide or prioritize your time among leisure activities; or how many people to hire in the business you run. Life is full of choices. Microeconomics can help you decide how to best make use of the choices available to you.

 

What is Microeconomics

Microeconomics is the branch of economics that analyzes the market behavior of individual consumers and firms in the hope of understanding the decision-making process of firms and households. It is concerned with the factors that influence the choices made by buyers and sellers. In particular, microeconomics focuses on the patterns of supply and demand and the determination of price and output in individual markets (e.g. coffee industry).

 

The study of economics is generally divided into Micro and Macro economics. Microeconomics deals with the small picture - how businesses make decisions, whereas macroeconomics look at the big picture - how the national economy functions as a whole, and how the business world works.

 

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