mikrohagfræði

Mikrohagfræði is the Icelandic term for microeconomics, a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources. It focuses on the supply and demand for goods and services, how prices are determined, and how these factors influence individual economic agents.

Key concepts within mikrohagfræði include consumer theory, which analyzes how consumers make purchasing decisions based on their preferences and budget constraints, and producer theory, which examines how firms decide on the optimal level of output and the most efficient production methods. The interaction of consumers and producers in markets leads to the determination of equilibrium prices and quantities.

Mikrohagfræði also explores market structures, such as perfect competition, monopoly, and oligopoly, and their implications for economic efficiency and welfare. It provides a framework for understanding issues like taxation, government regulation, and the distribution of income. By analyzing the choices of individual economic actors, mikrohagfræði seeks to explain the functioning of the broader economy.