Microeconomics is the study of the behavior of individual households, firms and industries
as well as the supply and demand relationships between producers and consumers.
These relationships are ubiquitous. Even within the household, there is production.
For example, in the kitchen, you combine raw materials (meat, cheese, vegetables, eggs, salt and pepper)
with physical capital (a stove and frying pan) and your own human labor to produce an omelet,
which is demanded by you and members of your family.
Cooking an omelet for your family is a very simple example of an economic problem.
Studying its production leads us to ask three questions:
"What will be produced?" "How will it be produced?" and "Who will get what is produced?"
what you will learn
Microeconomics is generally concerned with market structure,
but at a more basic level it is a decision science.
The questions: "How many apples will farmers supply at a price of $100 per bushel?"
and "How many apples will consumers purchase at that price?"
reflect decisions made by farmers and consumers.
Government policy may affect the prices faced by consumers and producers,
so in this course we will also explore the role of taxation.
And in the advanced course,
we will explore the public policy implications in greater detail.