What is Microeconomics?

Microeconomics is a branch of economics that studies the behaviour of individuals and firms in the market. It focuses on the choices that individuals and firms make, and how these choices interact to determine prices, quantities, and the allocation of scarce resources.

Some of the key topics in microeconomics include:

• Demand and supply: Microeconomics studies how demand and supply interact to determine equilibrium prices in different markets and industries such as oil, coffee, wood and foodstuffs.
• Elasticity: Microeconomics studies how changes in market prices affect demand and supply.
• Market structures: Microeconomics studies different types of market structures, such as perfect competition, monopoly, and oligopoly.
• Game theory: Microeconomics studies how individuals and firms interact strategically.
• Public goods: Microeconomics studies how pure and quasi public goods are provided and financed.

Here are some examples of topical microeconomic issues in the UK:

• The impact of Brexit: Brexit is likely to have a significant impact on the UK economy. Micro-economists are studying the potential impact of Brexit on prices, quantities, and the allocation of resources across different industries and sectors and the effect of Brexit at household level.
• The rising cost of living: The cost of living in the UK has been rising steadily in recent years. Micro-economists are studying the supply and demand-side factors that are driving up the cost of living and the impact of rising prices on individuals and firms.
• The digital economy: The digital economy is growing rapidly in the UK. Micro-economists are studying the impact of the digital economy on prices, quantities, and the allocation of resources.
• The gig economy: The gig economy is becoming increasingly popular in the UK. Micro-economists are studying the impact of the gig economy on individuals and firms including real wages and working poverty.
• The housing market: This is a major sector of the UK economy. It includes the buying, selling, and renting of homes. Microeconomists study the housing market to understand how prices, quantities, and the allocation of resources are determined in this market.
  

Microeconomics is a complex and fascinating subject. It provides insights into how the economy works and how individuals and firms make decisions. Microeconomists are studying a wide range of topical issues in the UK, and their work is helping to inform policy decisions.