Economics is the study of how individuals, businesses, governments, and societies make choices about allocating scarce resources to satisfy their needs and wants. It explores the production, distribution, and consumption of goods and services, aiming to understand how economies function and how economic agents interact.

Main Areas of Economics

Economics is broadly divided into two main branches:

1. Microeconomics

Microeconomics focuses on the behavior of individual units—such as consumers, firms, and markets. It examines:

• Demand and supply: How prices and quantities are determined in markets.
• Consumer behavior: How individuals make decisions to maximize utility.
• Production and costs: How firms decide what to produce and at what cost.
• Market structures: From perfect competition to monopolies.
• Labor and capital markets: How wages and returns on investment are determined.
• Externalities and public goods: How market failures can occur and be addressed.