The subject of microeconomics is the study of the behavior of individual economic agents (households, firms). This section examines the prices and volumes of production and consumption of specific products and services. According to C. McConnell (p. 113), “Today’s market economies rely mainly on the activities of consumers, businesses, and resource suppliers to allocate resources efficiently. Those activities and their outcomes are the subject of microeconomics”.
The object of study of microeconomics is the economic choice is made by small economic units such as households, businesses and individual consumers. Deep source of all economic problems lies in the relative scarcity of available human resources and the state, on the one hand, and the unbounded constantly evolving needs on the other. The consumer because of the limitations of his income can’t have all goods and services he wants. The company has to determine the priorities for the development of its activities abandoning of other projects.
Limited economic resources and unlimited human desire creates the fundamental economic problem of choice - a choice of directions and methods of allocation of scarce resources between competing objectives. Microeconomics explains how and why economic decisions are taken at the lowest level - how consumers make decisions about buying goods and how their choices affect changes in prices and incomes; how firms plan the number of workers; as workers decide where and how they need to work.
Microeconomics theory includes the theory of markets for goods and services. Relationships on the markets are built at the expense of participation of producers and consumers, and the last act as individuals. For market research microeconomics suited both sides. On the one hand the market acts as a complete system with independent supply and demand. On the other hand, the market is presented as a system of interrelated elements (members) having interdependent interests, influencing the formation of supply and demand.
Works Cited
McConnell, Campbell R. Economics: Principles, Problems, and Policies. 18th ed. New York: McGraw-Hill, 2009. Print.
