Microeconomics studies the economic behavior of individuals, households, and firms. While macroeconomics looks at the whole economy, micro zooms in on specific markets — how prices are set, how consumers choose between products, how firms decide what to produce, and how workers negotiate wages.
Core microeconomic concepts: supply and demand, elasticity, marginal utility, market structures (perfect competition, monopoly, oligopoly), and game theory. These tools explain everything from why coffee costs $5 at Starbucks to why pharmaceutical companies charge differently in different countries.
Microeconomics has enormous practical value. Businesses use it for pricing strategies. Governments use it to design regulations and antitrust policy. The field of behavioral economics (pioneered by Daniel Kahneman and Richard Thaler) extended micro by incorporating psychological insights — showing that humans are not always the rational decision-makers that traditional models assume.