Microeconomics studied a separate individual or individual households participating in economic relations. Microeconomics examines all the possible motives of the individual market that forced him to take any decision with respect to this product. Reveals the extent to which the individual is independent in its choice.
Microeconomics examines a group of individuals who share a common industrial activity. An example is the company that performs a certain kind of activity. In this case, microeconomics, studying the market relations between employees of the company, is taking into account not a set of individuals working in separately, but the company as a whole, studying its behavior in this market. Here stands the production also stands as a whole. Microeconomics deals with the study of factor markets, raw materials and resources.
Because market pricing of goods and services is extremely important for microeconomics, it also consider income generation of consumers who are directly related to the principles of the formation of factor prices, as well as the laws of the distribution of income by the factors of production. Exploring the theory of individual markets, microeconomics assesses economic equilibrium in general, making the relation of global proportions.
The main laws of microeconomics are the law of supply and law of demand. The market mechanism operates on the basis of economic laws which characterize changes in demand, changes in the proposal changes the equilibrium price, competition, cost, utility and profit. Market mechanism can satisfy only those needs of the individual and society, which are expressed through demand. The law of demand: If the price of any goods increased, while all other parameters remain unchanged, the demand will be brought to a smaller amount of this product. The law of supply: the volume of supply of goods increases with an increase in prices and decreases at lower prices.
Works Cited
McConnell, Campbell R. Economics: Principles, Problems, and Policies. 18th ed. New York: McGraw-Hill, 2009. Print.
