Microeconomics is the branch of economics that looks specifically at how individual actions and interactions affect single markets. The focus is on how human actions and decisions affect how scarce resources are utilised and distributed.

1. DEFINING
MICROECONOMICS
D o m e n Z a v r l

2. DOMEN ZAVRL
2
Microeconomics is the branch of economics that
looks specifically at how individual actions and in-
teractions affect single markets. The focus is on how
human actions and decisions affect how scarce re-
sources are utilised and distributed.

3. DOME N ZAVRL
3
Microeconomics also
tells us that when supply
of a product becomes
short, demand will rise
and therefore so will
prices.
GOALS OF MICROECONOMICS
The key goals of microeconomic analysis
include identifying how individuals can
make decisions that will result in increased
productivity or efficiency, how and why
different goods on the market attract
different values, and how individuals and
groups of individuals can coordinate their
efforts with each other to achieve the best
results.
USES OF MICROECONOMICS
Microeconomics does not attempt to explain
what should be happening in a market, but
rather defines what can be expected to
happen if certain conditions occur or change.
For example, microeconomics explains that
consumers will purchase less volume of a
product if the price of that product is raised.
Conversely, microeconomics also tells us
that when supply of a product becomes
short, demand will rise and therefore so will
prices. Microeconomics can therefore be used
by investors to help predict behaviours in
specific markets over the short term.

4. DOMEN ZAVRL
Macroeconomics focuses on aggre-
gate economies on a much broader
scale. You can learn more about this
by visiting the blog of Domen Zavrl.