Chapter 2 of 'Microelectronic Circuits' by Sedra and Smith focuses on operational amplifiers (op-amps), covering their ideal characteristics, configurations (inverting, non-inverting, and difference amplifiers), and the impact of negative feedback on signal processing. The text details the fundamentals of op-amp design including terminal functionalities, gain calculations, and the use of negative feedback to enhance amplifier stability and accuracy. Applications and problem sets are also included to reinforce the theoretical concepts presented.