2.1 A brief review of microeconomic theory

Microeconomics concerns decision making by individuals and small groups, such as families, clubs, firms, and governmental agencies.

You have to make choices because of:
1. Limited income
2. Limited time

Microeconomic theory offers a general theory about how people make such decisions.

Microeconomics divided in 5 sections:
1. Theory of consumer choice and demand
2. Choices made by firms or business organization
3. How consumers and firms interact.
4. Description the supply and demand for inputs into the productive process.
5. Deals with the area knows as welfare economics