In simple terms, microeconomics deals with the analysis of how the individual economic agents such as consumers and the producers make their choices, the main factors that influence their choices and how such choices affect the demand, the supply, and the market price for goods and services in the goods market.

For example, it is in microeconomics where we study how the consumer minimizes her expenditure and how allocates her limited resources towards the consumption of a bundle of goods in order to maximize her utility. In addition, we study how the firm decides on the optimal combination of inputs that would minimize its input costs as well as maximize its production.