- Definition of microeconomics
Microeconomics is a category in economics meaning the study of behavior in individual households and firms. Micro means small. This also means that it is on a small scale rather than with macro economics that takes in larger entities. With microeconomics one will study behavior of supply and demand of goods and services, prices, how to price things, quantity and quality of these goods and services.
Some microeconomic problems and their solutions are as follows:
Since microeconomics deals with individual households income is certainly an issue within microeconomics. It is also a larger scale issue. For a single household the issue of income is often resolved via loans, a second job or finding re-employment after job loss has occurred. On the large scale it means companies have to open up the job market to help the microeconomics solution.
Costs are another area that is both micro and macro when it comes to the problems and their solutions. For example, a single household may be having trouble with costs at the gas pump. To resolve this matter they will try to find the cheapest gas in their area. On the larger scale they wait as do others for the gas prices to go down across the nation.
- Availability of goods and services
Supply and demand is really the largest area for microeconomics talks and problems. We can also use the gas example to solve this riddle. The supply of gas, we have been told, is low and that reserves are being tapped to help the costs of the product lower.
The demand for gas is higher on an individual scales as well as through the nation. With the availability of goods or services the solution is to have just enough to get a fair price, but not have a lower amount that it causes no sales.