What is the focus of "microeconomics"?

• A. The overall economy and its growth rates
• B. The behavior of individual consumers and businesses
• C. The statistical study of employment rates
• D. The impact of global trade on national economies

Answer: (B)

Microeconomics is primarily concerned with the behavior of individual consumers and businesses. It analyzes how these entities make decisions regarding the allocation of scarce resources, how they respond to changes in prices, and how they interact within various markets. This focus helps us understand the fundamentals of demand and supply, pricing mechanisms, and the factors that influence consumer choices and business strategies.

Microeconomic analysis is vital for understanding specific markets or sectors, such as how a change in price might affect the quantity of a product sold, or how individual firms set their output and pricing in response to competition. By examining these small-scale economic actions, microeconomics provides insights that can affect broader economic outcomes and policies without necessarily addressing broader market trends or macroeconomic indicators, such as overall growth rates or national employment statistics.