Microeconomics Essay Example | Topics and Well Written Essays - 1250 words - 4

Micro frugals - Essay ExampleIn addition, microeconomics looks into decisions made by businesses regarding production and prices attached to goods and services produced by individual businesses. In general, microeconomics deals with economic decisions made on a micro level (McEachern 13).A clear understanding of microeconomics is essential since it builds a platform through which macroeconomics is constructed. Macroeconomics pays attention to a wider vista of economic issues. Its main focus is on the national economy in general, providing a basis understanding of how issues relate to each other in the initiation of business. It is essential to have an understanding of microeconomics and macroeconomics in order to learn how the economy works for a given country. Decisions made by firms and individuals in microeconomics are generally influenced by costs and benefits. In this case, cost foot occur in the form of financial cost or opportunity costs. Financial costs can be in the form of total variable costs or average fixed costs while opportunity costs are alternatives foregone (McEachern 14).Microeconomics has a number of questions that economics under this branch of economy attempt to answer. Examples of such questions include impacts of changes on prices of goods on peoples purchasing decisions, impacts of change magnitude income, and impacts of changes on interests on national savings. Economists are of the opinion that the market has two parts the study and supply part. The demand ramp consists of households, economic agents, and firms. These components of the demand side go to markets to source certain goods and services. The supply side comprises of suppliers who supply goods and services to specific markets. In this case, firms are the main suppliers (Boyes & Melvin 21).In markets holding finished goods, those who demand mainly comprise of consumers at household levels. Contrary to this, the main consumers of capital goods include firms such as