What Is The Subject Matter Of Microeconomics?

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El Lly answered

Hello,

Thanks for your question on the subject matter of microeconomics.

'Micro', by definition, means small. So with this alone, we can understand that the study of microeconomics is oriented around the individual and their specific behaviours. It is concerned with individual consumer habits along with the spending of a particular household and so on. 

The main subject matters of microeconomics are as followed:

  • Commodity Pricing

The determination of pricing for individual products is based on supply and demand. Economics analyses supply and demand at large, however micro economics is concerned with individual and specific demand (consumer) and supply (producer).

  • Factor pricing

Microeconomics is concerned with individual wages, rent, profit, interest and so on.

  • Welfare theory

Microeconomics analyses the necessity of specific distribution of resources in order to benefit welfare in general. It is focused on the 'what', 'when', 'how', and 'why' of production. 

I hope this answers your question.

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