Economics refers to choices made regarding production, distribution, and consumption of goods and services during scarcity. Microeconomics studies individual and firm decision-making in times of scarcity. It examines market structures and how entities interact, analyzes supply and demand impacts on production and price, understands cost reduction and profit increase, and studies resource distribution. Microeconomics considers factors like elasticity of demand, supply and demand law, utility, costs, marginal cost, opportunity cost, market failure, externalities, and market structures to understand individual and firm behavior.