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15 Examples of Microeconomics

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Microeconomics is the study of the economic behavior of individuals, households and firms. Where macroeconomics looks at the big picture of the economy, microeconomics looks at the individual behaviors that drive economic processes. For the most part, microeconomics and macroeconomics examine the same concepts at different levels. The following are illustrative examples of microeconomics.

Demand

How demand for goods is influenced by income, preferences, prices and other factors such as expectations.

Supply

How producers decide to enter markets, scale production and exit markets.

Prices

How individuals, households and firms react to prices and influence prices with their supply and demand. For example, the observation that some customary prices appear to be sticky in that consumers resist buying above a particular historically established price.

Elasticity

Elasticity is how supply and demand reacts to change. For example, a household that demands less of a good when the price increases due to the availability of substitutes.

Opportunity Cost

The tradeoffs that individuals and firms make to manage constrained resources such as time, money, capital and land. For example, an individual who can choose to go to university or start a company who doesn't have enough time or money to do both.

Labor Economics

Modeling the supply and demand for labor. For example, looking at how expectations for economic growth impact the labour participation rate.

Competition

Modeling competition in markets. For example, the use of game theory to model a price war between competitors.

Competitive Advantage

Competitive advantage is the ability of certain firms to outcompete all competition in a particular area. For example, a sporting goods company with superior brand recognition and a positive brand image that can charge premium prices and still enjoy high demand for its products.

Consumer Choice

How needs, perceptions and information shape consumer choices. For example, the idea that consumers maximize their expected utility of purchases meaning that they buy the things they expect to be most useful to them.

Utility & Preferences

Modeling the value of goods and services in terms of utility to consumers and consumer preferences.

Consumer Confidence

How consumer expectations for the future influence spending, saving, investment and labor participation.

Business Confidence

How producer expectations for the future influence hiring, capital investment and supply.

Information Economics

In many cases, macroeconomics assumes that all market participants have perfect information in order to simplify models. Microeconomics may look at the realities of imperfect information and its influence on markets. For example, how uncertainty regarding product quality impacts consumer decisions.

Welfare Economics

Modeling the impact of social programs on economic decisions such as labor participation or risk taking. For example, looking at how a social safety net encourages individuals to start or fund brave new businesses.

Productivity

Modeling the productivity of individuals and firms including factors such as automation, tools and knowledge.

Summary

Overview

Microeconomics looks at the economic behavior of firms and individuals.
Overview: Microeconomics
Type
Definition
The study of the economic behavior of individuals, households and firms.
Related Concepts
Next: Macroeconomics
More about microeconomics:
Added Value
Advanced Economy
Adverse Selection
Alpha
Animal Spirits
Arbitrage
Attention Economics
Bank Reserves
Bargaining Power
Barriers To Entry
Behavioral Economics
Behavioral Finance
Bounded Growth
Bounded Rationality
Business Cluster
Business Value
Capital Flight
Capital Goods
Capitalism
Capitulation
Category Killer
Circular Economy
Club Theory
Commodification
Commodities
Commons
Comparative Advantage
Competition
Competitive Parity
Competitiveness
Consumerism
Cost Competition
Critical Mass
Customary Pricing
Deadweight Loss
Debt
Deflation
Demand
Division Of Labor
Dumping
Economic Activity
Economic Advantage
Economic Bad
Economic Conditions
Economic Context
Economic Development
Economic Growth
Economic Infrastructure
Economic Problems
Economic Sector
Economic Systems
Economic Theories
Economics
Economies Of Density
Economies Of Scale
Ecotax
Equilibrium
Excess Burden
Experience Economy
Externalities
Extreme Value Theory
Factors Of Production
Failure Demand
Finance
Fiscal Dominance
Food Sovereignty
Free Market
Gains From Trade
Gdp
Giffen Good
Goods
Happiness Economics
Hyperinflation
Income Distribution
Industrial Complex
Industrial Economy
Industrialization
Inferior Good
Inflation
Information Asymmetry
Intangible Goods
Intangible Value
Investing
Invisible Hand
Knowledge Economy
Labor
Labor Productivity
Long Tail
Macroeconomics
Marginal Utility
Market Conditions
Market Economy
Market Failure
Market Forces
Market Power
Marketing Economics
Markets
Mean Regression
Media Economics
Merit Good
Microeconomics
Middle Class
Monetary Policy
Monopoly
Overexploitation
Plateau Effect
Predatory Pricing
Price Economics
Price Umbrella
Price War
Pricing Strategy
Production
Profit Motive
Rational Choice Theory
Rent Seeking
Resources
Rule Of Three
Scalability
Scale
Scarcity
Search Good
Service Economy
Shrinkflation
State Capitalism
Sticky Prices
Superior Good
Superior Goods
Supply
Supply Shock
Sustainable Economics
Switching Barriers
Threat Of Substitutes
Trade War
Traditional Economy
Uneconomic Growth
Unsought Goods
Value
Value Creation
Veblen Goods
Zero-sum Game
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Consumer Economics

The definition of consumer economics with examples.

Behavioral Economics

The definition of behavioral economics with examples.

Zero-sum Game

An activity that produces no value but is concerned with gaining a bigger piece of existing value.

Economics

Everyday examples of economics.

Capitalism

The basics of capitalism.

Economic Benefit

The common types of economic benefit.

Value Chain

An overview of value chains with complete examples.

Business Cycle

The phases and causes of the business cycle.

Commodification

The definition of commodification with examples.

Economy

The basic types of economy explained.

Media Economics

An overview of media economics with examples.

Labor Economics

An overview of labor economics with examples.

Economic Problems

Several types of severe economic problems.

Inflation vs Hyperinflation

The difference between inflation and hyperinflation.

Fiscal Dominance

An overview of fiscal dominance.

Inflation vs Deflation

The difference between inflation and deflation.

Protectionism vs Free Trade

The difference between protectionism and free trade.

Currency War

The definition of currency war with examples.

Speculative Bubbles

The common types of speculative bubble.

Scarcity

A complete overview of scarcity with examples.

Capital Flight

The definition of capital flight with examples.

Economic Issues

A list of common economic issues.
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