Therefore, I would like to apply a place in MSc Economics, write all the interesting facts of today´s modern life, including correct and simple explanations, so that anyone can understand all the topics without having doubts of the concepts and of the more difficult topics of economy. Similarly, a landlord will seek to rent an apartment at the highest price possible, as their motivation generally is to get the best return from renting out the apartment. Being aware of the current economic situation is vital in buying and selling. There are many varying principles and thoughts in the study of microeconomics that influence these values choices. The field of microeconomics interests investors because individual consumer spending accounts for roughly 68%, or about two-thirds, of the U.S. economy. Microeconomics and macroeconomics (the study of the larger aggregate economy) together make up the two main branches of economics.. Microeconomics can be easily understood through the term micro itself which means small, microeconomics focuses on small level that is to say it includes areas of individual decision making and its core components include production, exchange, distribution and consumption. Businesses set prices and make other decisions based on microeconomics. And this goes to the heart of microeconomics – the value of one choice over another. The term economics is the broader term, however within this, there are additional fields such as microeconomics and macroeconomics. It is highly helpful in the formulation of economic policies that will promote the welfare of the masses. For example, those aware of the current economic situation may be aware the depth of the recession which makes a period of low-interest rates more likely. In addition, individuals will understand how easily we use microeconomics on a daily basis. Accessed Sept. 10, 2020. Microeconomics also applies to businesses. Based on all the above factors, you set a budget to get the most satisfaction for the least possible rent. In a capitalist economy, both consumers and businesses make thousands of big and small decisions each year guided by microeconomic issues. There is a lot of material to learn from microeconomics, but one can only feel that knowing how to make a profit and how the labor market operates its income distribution is important because, Abstract When you buy something and pay for it, you analyze the real-value of that product and whether it is worth spending that much money or not. Investopedia requires writers to use primary sources to support their work. The examples they give provide us a fun way of learning, and of, externality, on the other hand, if it is beneficial, it is called a positive externality. That is the opportunity cost of finding the right apartment. For instance, individuals use free trade without thinking about it. Importance and Uses of Microeconomics! Equilibrium in everyday life Posted: March 1, 2011 in Physics. Microeconomics is the branch of economics that analyzes market behavior of individuals and firms in order to understand their decision-making processes. Going by the principles of microeconomics, that’s why housing costs in New York are grave. Microeconomics occupies a vital place in economics and it has both theoretical and practical importance. In order to get those things, people have to spend money. Then I will take it back to the role of the government with externalities which will then lead to how externalities are relevant in my daily life as a student at Cal State Dominguez Hills and why it is important to my readers to understand why. The reasonable mind is the proof of your education as it directs you to take right decisions by reviewing all the available possibilities.