EPF Supply and Demand Basics Practice Test

The primary focus of microeconomics is on individual and business choices. This area of economics examines how specific entities, such as consumers or firms, make decisions regarding the allocation of scarce resources. Microeconomics explores concepts such as supply and demand, price determination, and the behavior of individuals and organizations in markets. This includes understanding how these entities respond to changes in prices, income levels, and other economic factors.

While elements like national GDP, global markets, and government regulations are essential in the broader context of economics, they mainly fall under the study of macroeconomics or other economic branches. Microeconomics provides valuable insight into how localized factors influence economic behavior, thereby allowing for a deeper understanding of market dynamics and economic policy at the individual level.