Microeconomics: Definition, concepts and examples

Microeconomics is the study of the economic behaviour of individuals decision-making units such as individual consumers, resources owners and business firm in the free enterprise system.

Microeconomics is a branch of economics that studies a smaller area of economics, including the implications of individual human action and firms on the utilization and allocation of scarce resources. Microeconomics shows conditions under which free markets lead to desirable allocations, and why different goods have different values. Microeconomics does not attempt to explain what should happen in a market, it only explains what to expect if certain conditions change.

The study of microeconomics involves several key concepts, including: Demand, supply and equilibrium; Production theory (converting inputs into outputs); Costs of production and Labour economics.

Management / MBA question on Microeconomics:

Q. Select 1 or 2 key theoretical concepts. with a strong microeconomic focus. from what has been discussed in class and provide a critical overview of its value in explaining or solving one or more real world microeconomic challenges (some general thematic suggestions include: “impact of smoking ban on pub closures in the UK’;”monopoly power and monopoly pricing amongst pharmaceutical companies’; ‘priclng policies amongst budget and other airlines’; etc,). Your work should be presented in essay format but may include tables. diagrams, etc, and may need a bibliography, dependirg on what you choose to work on. All bibliography entries need to conform to the Harvard referencing style.

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