The study of the behaviour and decisions of households and firms, and the performance of individual markets is called what?

The study of the behaviour and decisions of households and firms, and the performance of individual markets is called what?

• A. Microeconomics
• B. Macroeconomics
• C. Market
• D. Economic System

Answer: (A)

Microeconomics is the study of how households and firms make choices and how these choices shape the prices and quantities in individual markets. It looks at what a family decides to buy given its income and the prices, and how a firm decides how much to produce and at what price, with supply and demand in that specific market setting determining the outcome. This differs from macroeconomics, which focuses on the whole economy—things like inflation, unemployment, and total national income. The other terms refer to broader ideas: a market is simply where buyers and sellers meet to exchange, and an economic system is the overall structure that governs how a country allocates its resources.

Microeconomics is the study of how households and firms make choices and how these choices shape the prices and quantities in individual markets. It looks at what a family decides to buy given its income and the prices, and how a firm decides how much to produce and at what price, with supply and demand in that specific market setting determining the outcome. This differs from macroeconomics, which focuses on the whole economy—things like inflation, unemployment, and total national income. The other terms refer to broader ideas: a market is simply where buyers and sellers meet to exchange, and an economic system is the overall structure that governs how a country allocates its resources.