What is Microeconomics?
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A definition:
- Microeconomics is the social science concerning the interactions
of rational decisions about allocation of scarce resources.
- Compare macroeconomics: "the social science concerning the flows
of scarce resources and products in the economy."
In the definition of microeconomics
- Social and interaction both indicate that behaviors of different
individuals affect each other.
- Allocation simply means a decision about use of a resource.
- Rational here does not imply "profit maximization", or even
conventional wisdom ("joushiki") or usual morality. Merely that the
decisions are systematically intended to accomplish well-understood
goals. (I.e., profit maximization is a typical example of such a
goal.)
- A resource is anything useful, whether natural or artificial. A
resource is scarce if somebody somewhere could use a little bit
more of it (for free).
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