Question

How does the microeconomic environment affect your daily life? What can you do to live a better life after completing this course?

Answer 1

Many people are given limited time and money. They can't buy or do whatever they want, so they make measured microeconomic choices on how to maximize personal satisfaction by using limited resources. Similarly, time and money are also limited for a company. Businesses must make decisions leading to the best business result that may be to maximize profit. Another economic concept which comes into play when consumers make decisions is the cost of an opportunity. When a person makes a decision, the cost of forgoing the next best alternative is measured as well.

Diminishing marginal utility, another economic input, explains the general consumer perception that the lower the value you get the more you buy it. For example, you may feel really happy when you eat one burger. But if you're eating a second burger, you may feel less comfortable than with the first burger.

The academic discipline of microeconomics has little effect on the daily lives of the majority of people. Microeconomic forces, however, have tremendous impact on the daily lives of all. We can start with the fact that microeconomic forces set the salaries of most of the citizens. Usually, wages are set by the supply and demand for people doing a particular job in a given place. If you are doing a job where there's a lot of demand, you're likely to make more money than if you're doing a job that isn't especially challenging.

The other broad impact category is the price impact. Microeconomic considerations set the price of almost everything we buy every day. The price of everything from the rent or mortgage payments we make to the price of the products we purchase for making our food is largely determined by supply and demand.
In other words, the microeconomic forces decide how much money we're going to make and how much it's going to cost to buy the things we need. This indicates that we are being profoundly influenced by such powers.