The study of how people make choices under conditions of scarcity and of the results of those choices for society.
In a market system, allocation of resources occur via the price system, incomes and preferences
What’s the difference between Microeconomics & Macroeconomics?
Microeconomics examines small economic units, the components of the economy.
For example: individuals, households, firms, industries
Macroeconomics looks at aggregates.
For example: national output, overall price level, aggregate unemployment
In a market economy, these questions are handled by the market.
What & how much to produce:
determined by demand & supply conditions, individual choices, & pursuit of profit.
How to produce:
determined by technology & resource costs.
Distribution:
based on ability & willingness to pay the price.
What if consumer wants or technology change?
Those changes alter demand & supply, which changes prices, profits, & consequently output levels & distribution.