"Microeconomics is a branch of mainstream economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms."
The study of individual decision-making of households & businesses and the market forces that affect them.
Supply and Demand: The fundamental economic concept that explains the relationship between the price of a good or service and the quantity supplied and demanded.
Market structures: Describes how different market structures shape competition and pricing of goods.
Elasticity of demand: A measure of how responsive the quantity demanded of a good is to changes in its price.
Costs of production: The costs associated with producing a good, including fixed and variable costs, opportunity costs, and economies of scale.
Theory of consumer behavior: Examines consumers' decision-making processes when making purchases, including preferences, budget constraints, and the law of diminishing marginal utility.
Theory of the firm: Analyzes how firms make production decisions, and how those decisions are influenced by factors such as competition, market structure, and technological change.
Monopoly: A market structure in which there is only one seller of a good or service, leading to higher prices and lower output than in competitive markets.
Oligopoly: A market structure in which a few firms dominate the market, leading to strategic interaction between firms to maximize profits.
Externalities: The unintended consequences of economic activity that affect third parties, either positively or negatively.
Public goods: Goods that are non-excludable and non-rivalrous, such as national defense or public parks, which are provided by the government because they cannot be provided through private markets.
Market failures: Situations in which markets fail to allocate resources efficiently, leading to outcomes such as market power, negative externalities, and a lack of public goods.
Government intervention: The ways in which the government intervenes in markets to address market failures, promote competition, or achieve other goals.
Income and wealth inequality: The distribution of income and wealth within society, and the factors that influence it.
Labor markets: The market for labor, including issues such as wage determination, discrimination, and the minimum wage.
International trade: The exchange of goods and services between countries, including issues such as tariffs, trade agreements, and exchange rates.
Consumer theory: It studies the behavior of individual consumers or households and their demand for goods and services. It examines how consumers make choices and allocate their resources based on their preferences, budget constraint, and market equilibrium.
Production theory: It analyzes how firms or producers make decisions relating to production processes, cost, input-output combinations, and technology. It also examines how firms respond to market demand and competition.
Market structure and pricing: It studies different types of market structures and how they vary in terms of competition, regulation, and pricing strategies. It also examines how firms collude, compete, or monopolize markets, and how governments intervene to promote efficiency and equity.
Industrial organization: It is a branch of microeconomics that focuses on the structure, behavior, and performance of industries or sectors. It analyzes how firms interact with each other, suppliers, customers, and other stakeholders, and how they respond to changes in market conditions.
Game theory: It is a mathematical framework that analyzes strategic interactions among economic agents, such as firms, consumers, and governments. It predicts the outcomes of different types of games, such as the prisoner's dilemma, Nash equilibrium, etc., and provides insights into the behavior of rational agents.
Welfare economics: It deals with the measurement and distribution of economic welfare among individuals or society. It analyzes different types of market failures, externalities, and public goods, and evaluates the different policy options available to promote welfare.
Behavioral economics: It examines how cognitive, emotional, and social factors influence economic decision-making by individuals and groups. It also studies how people's preferences, beliefs, and expectations are shaped by culture, identity, and context.
Information economics: It analyzes the role of information and communication technologies in facilitating economic transactions, reducing uncertainty, and promoting efficiency. It also studies how information asymmetries, moral hazards, and adverse selection can create market failures and distortions.
International trade: It studies the exchange of goods and services between countries, including theories of comparative advantage, trade policy, protectionism, and globalization. It also examines the effects of international trade on economic growth, income distribution, and environmental sustainability.
"Microeconomics focuses on the study of individual markets, sectors, or industries as opposed to the national economy as a whole, which is studied in macroeconomics."
"One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and allocate limited resources among alternative uses."
"Microeconomics shows conditions under which free markets lead to desirable allocations."
"It also analyzes market failure, where markets fail to produce efficient results."
"While microeconomics focuses on firms and individuals, macroeconomics focuses on the sum total of economic activity, dealing with the issues of growth, inflation, and unemployment—and with national policies relating to these issues."
"Microeconomics also deals with the effects of economic policies (such as changing taxation levels) on microeconomic behavior and thus on the aforementioned aspects of the economy."
"Much of modern macroeconomic theories has been built upon microfoundations—i.e., based upon basic assumptions about micro-level behavior."