Microeconomics facts for kids
Microeconomics is a part of economics that studies how people and businesses make choices. It looks at decisions made on a small scale. For example, it explores why you choose one snack over another. It also looks at how a company decides how many toys to produce.
Microeconomics is different from macroeconomics. Macroeconomics studies the economy as a whole. It looks at big things like how many jobs there are in a country.
Contents
How People Make Choices
Microeconomics helps us understand how individuals decide what to buy. This is called Consumer Theory. It looks at things like:
- What products people want
- How much money they have to spend
- How prices affect their choices
For example, if the price of your favorite video game drops, you might decide to buy it. Microeconomics helps explain why.
How Businesses Make Choices
Another part of microeconomics is the Theory of the Firm. This looks at how businesses make decisions. It helps us understand:
- How many products a company should make
- What price they should sell their products for
- How they decide to hire workers
Businesses want to make a profit. Microeconomics studies how they try to do this.
Playing the Game: Game Theory
Sometimes, your choices depend on what other people do. This is where Game Theory comes in. It studies situations where people act "strategically." This means they think about what others might do before making their own move.
Imagine you and a friend are deciding where to eat. Your choice might depend on what your friend wants. Game theory helps predict outcomes in these kinds of situations. It's like a strategy game, but with real-life decisions.
Related pages
Images for kids
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This market in Delhi shows how buyers and sellers meet. Microeconomics studies how they agree on prices for goods.
See also
In Spanish: Microeconomía para niños
