Micro Donald A. Coffin Microeconomics Between the middle of 1999 and the middle of 2000, gasoline prices have almost doubled. Now, they're falling again. In 1970, we used 0.432 kilowatt hours of electricity to produce one dollar's worth of real output. These types of questions make up the primary subject matter of microeconomics.
Economists look at microeconomic issues and problems by developing theories of behavior .
For example, we ask what people are trying to accomplish as buyers of products and how they seek to do that. We believe that people make decisions as buyers of products by trying to make themselves as well off as possible, within the constraints they face. We conclude, among other things, that people will in general seek to buy less of a product when its price rises and more of a product when its price falls, which is hardly a controversial conclusion. But we also conclude that it's not just the level a product's price that matters, it's the price of one product relative to the price of another product. Here's an example.