Unlimited human wants and scarce resources force people to
make choices between various goods and services. Economics tries to provide
solutions to the problem of scarcity and choice. The field of economics is
divided into two areas; microeconomics and macroeconomics.
In this chapter we discussed the importance of microeconomics.
We examined how
it provides answers to questions like what to produce, how to produce, and for
whom to produce. We have discussed the difference between microeconomics and
macroeconomics. We also studied the various kinds of economies: market economy,
command economy and mixed economy. As individuals have to choose between
alternatives, opportunity cost plays a significant role in the decision making