What is the definition of the term 'microeconomics' and what are some key principles and applications of the field?

Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of limited resources.

The key principles of microeconomics include:

• Market: Microeconomics focuses on the behavior of individuals and firms in a market system, including how they interact and the resulting outcomes.
• Price: Microeconomics examines how prices are determined by the interaction of supply and demand.
• Demand: Microeconomics analyzes the factors that influence the demand for a particular good or service.
• Supply: Microeconomics examines the factors that influence the supply of a particular good or service.
• Costs: Microeconomics analyzes the costs of production, including the different types of costs that firms incur.

Microeconomics has numerous applications, including:

• Business: Microeconomics can help businesses make decisions about pricing, production, and investment.
• Public Policy: Microeconomics is used to analyze the effects of policies on markets and individuals, such as taxes and subsidies.
• International Trade: Microeconomics can help explain patterns of international trade and the effects of trade policies.
• Personal Finance: Microeconomics can be applied to personal financial decisions, such as budgeting and saving.