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Microeconomics

Unit 1: basic economic concepts, unit 2: supply, demand, and market equilibrium, unit 3: elasticity, unit 4: consumer and producer surplus, market interventions, and international trade, unit 5: consumer theory, unit 6: production decisions and economic profit, unit 7: forms of competition, unit 8: factor markets, unit 9: market failure and the role of government.

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• Prof. Robert M. Townsend

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Intermediate microeconomic theory, three exams (60%).

There will be two exams of 80 minutes in length. There will also be a final exam during the finals period. You will have 120 minutes to complete the final. You should have extra time to help you to relax. It will count the same as each of the prior two exams, so in terms of overall scores, it is counted as a third midterm. The date of the final exam is set by the MIT Registrar’s office, which strategically withholds announcing the exam dates until late in the semester so that you cannot pick your classes based on final exam schedules. Each exam will tend to focus on the new material since the previous exam, although of course you will need to understand the older material to apply the new material. The final will be comprehensive, from the beginning of the class, as the material is cumulative. This is a good time to review the course material. The exams will be based on the lecture notes, problem sets, assigned readings, classroom discussion, and TA sessions.

Performance on exams is highly correlated with performance on problem sets. If you miss an exam for an excused reason, I will offer a written makeup or an oral exam on a whiteboard online. Students typically find oral exams painful. But I will not write a new exam for only a few students—so an oral exam is likely.

Exam 1 with solutions (PDF)

Exam 2 with solutions (PDF)

Exam 3 with solution (PDF)

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Review Questions

Give the three reasons that explain why the division of labor increases an economy’s level of production.

What are three reasons to study economics?

What is the difference between microeconomics and macroeconomics?

What are examples of individual economic agents?

What are the three main goals of macroeconomics?

How did John Maynard Keynes define economics?

Are households primarily buyers or sellers in the goods and services market? In the labor market?

Are firms primarily buyers or sellers in the goods and services market? In the labor market?

What are the three ways that societies can organize themselves economically?

What is globalization? How do you think it might have affected the economy over the past decade?

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Economics Revision Essay Plans

Last updated 17 Dec 2019

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Mergers and consumer welfare (revision essay plan), air pollution and policies to control (revision essay plan), policies to improve competitiveness (revision essay plan), economic effects of higher interest rates (revision essay plan), current account deficit & policies (revision essay plan), unemployment and policy trade-offs (revision essay plan), case for cutting the national debt (revision essay plan), micro-finance (2019 revision update), essay on advertising and economic welfare, essay on oligopoly and collusion, policies to control inflation.

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Why is high inflation a problem?

Revision essay: exchange rate depreciation and macroeconomic objectives, to what extent should full-employment be the main macro policy objective, housing supply (revision essay plan), minimum alcohol pricing (revision essay plan), oligopoly and collusion (revision essay plan), building confidence in writing synoptic 25 mark essays (edexcel), behavioural and neo-classical economics (revision essay plan), barriers to entry and economic profit (revision essay plan), micro and macro impact of a plastic tax (revision essay plan), edge revision webinar: market failure and government intervention, farm subsidies (revision essay plan), competitiveness of the uk motor industry (revision essay plan), labour migration (revision essay plan), financial market failure (revision essay plan), tariff on chinese steel (revision essay plan), policies to improve food affordability (revision essay plan), reducing a trade deficit (revision essay plan), museums and government subsidy (revision essay plan), fiscal policy and inequality (revision essay plan), globalisation and inequality (revision essay plan), economic inactivity (revision essay plan), competition and consumer welfare (essay technique video), essay plan: is the euro the main cause of the crisis in greece and italy, china: successes and failures essay plan, our subjects.

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73 Microeconomics Essay Topics

🏆 best essay topics on microeconomics, ✍️ microeconomics essay topics for college, 👍 good microeconomics research topics & essay examples, 🎓 most interesting microeconomics research titles.

• The Analysis of “Microsoft’s Aggressive New Pricing Strategy“ Using Microeconomic Theory
• Walmart Brand Products’ Microeconomic Analysis
• How the Pearl Industry Causes Microeconomic Shifts
• Microeconomics: Understanding the Concept of Price Theory
• American Express Firm’s Microeconomic Analysis
• Microeconomic Theory: Wal-Mart Stores Inc.
• Principles of Microeconomics
• Foundation of Microeconomics. Country Analysis The three core economic issues which influence the decision-making and economic stability of the countries are What, How and to Whom.
• Microeconomics: Production, Costs and Profits Costs are defined as opportunities foregone when a decision is made; therefore, opportunity costs are costs of any action considered in form of greatest opportunity forgone.
• Microeconomics: Challenges Facing Financial Managers In this paper, the author analyzes the challenges faced by financial managers. The problems are highlighted in Microeconomics: Understanding the Market System.
• “Economics in One Lesson” by Henry Hazlitt in the Context of Microeconomics This paper discusses the book “Economics in One Lesson” by Henry Hazlitt and its relevance in understanding microeconomics.
• Microeconomics: Scarcity and Social Provisioning Venturing into international trading is beneficial for a nation’s economy; however, clear policies should be set to prevent a collapse in traditional economies.
• Microeconomic Factors of Opioid Addiction It was distinguished that people who struggle with employment or financial difficulties often develop unhealthy coping mechanisms such as opioid addictions.
• Microeconomic Analysis of Australian Oil Market Since the Morrisson government significantly promoted the idea of reducing the pressure on the cost of living, one of the levers was the reduction of fuel excises.
• The US-China Trade War: Microeconomics Principles This paper uses the microeconomics principles to substantiate the impact of trade between China and the US, and the trade war on businesses and consumers of both countries.
• Microeconomics Case Analyses in Pharmacology This paper examines the pharmaceutical industry using the theory and models of industry structure and Pfizer’s make-or-buy decision for developing and producing its COVID vaccine.
• Microeconomics and Principles of Economics As far as some basic economic principles are concerned, it is important to mention that all of them are crucial for the creation of a successful business model.
• Microeconomic Analysis: Walmart Based on the factors considered and the criteria for choosing the resource and cost bases, specific solutions for optimizing the Equate product line will be proposed
• The Analysis of Microeconomics of Sberbank The purpose of this paper is to research the microeconomics of Sberbank, explore the state of the company on the market, and provide recommendations for its further expansion.
• Microeconomic Tools: Cost-Benefit Analysis The paper discusses an economic tool to aid social decision-making, that is mostly used by the government and private sector to evaluate the desirability of a given intervention.
• Microeconomics: Government and Market Relations Critiquing government policies and attempting to create one that will bring success are two different activities.
• Foundations of Microeconomics: Franchise Firms Franchise firms are the small businesses that are operated in such a way that they deal with goods of large corporations. They usually buy the products from the corporation at a discounted price.
• Microeconomics Principles: Production, Costs and Profits In the short run the companies may be very profitable leading to increase in the quantity produced by the companies which eventually attracts new entrants into the sector.
• Supply and Demand in Microeconomics: Pricing and Equilibrium
• Microeconomics vs. Macroeconomics: Key Differences and Interactions
• The Role of Microeconomics in Understanding Market Behavior
• The Fundamental Principles of Microeconomics
• Microeconomics and Rational Decision-Making: Analyzing Choices
• Elasticity of Demand in Microeconomics: Measuring Responsiveness
• Microeconomics of Perfect Competition: Features and Implications
• How Microeconomics Affects Everyday Life
• Monopoly in Microeconomics: Market Power and Pricing
• Microeconomics of Oligopoly: Strategic Behavior and Competition
• Principles of Microeconomics: Scarcity and Social Provisioning
• Monopolistic Competition: Characteristics and Implications in Microeconomics
• Consumer Behavior in Microeconomics: Preferences and Utility
• Microeconomics of Production: Cost Analysis and Efficiency
• Homogeneous and Differentiated Products in Microeconomics
• Microeconomics of Firms: Profit Maximization and Pricing Strategies
• Housing Supply and Suppliers: Are the Microeconomics of Housing Developers Important?
• Microeconomics of Market Failures: Causes and Solutions
• The Role of Government Intervention in Microeconomics
• Microeconomics of Information Asymmetry: Market Imperfections
• Externalities in Microeconomics: Costs and Benefits to Society
• Microeconomics of Labor Markets: Wage Determination and Employment
• Game Theory in Microeconomics: Strategic Decision-Making
• Microeconomics of Income Distribution: Gini Coefficient and Inequality
• The Microeconomics of Changing Income Distribution in Malaysia
• Microeconomics of Taxation: Incidence and Economic Efficiency
• How Microeconomics Affects Business
• Microeconomics of Price Controls: Ceilings and Floors
• International Cartels and the Microeconomics of the Emerging U.S. Electricity Industry
• Microeconomics of Market Structures: Comparing Models
• Knowledge Representation and Search Processes: A Contribution to the Microeconomics of Invention and Innovation
• Microeconomics of Competition Policy and Antitrust Laws
• The Microeconomic Foundations of Aggregate Production Functions
• Microeconomics and Its Main Functions
• Managerial Economics: Microeconomics Concepts
• Global Warming and Microeconomics: Efficient and Effective Policies to Solving Climate Change
• Microeconomics and Operations Research: Their Interactions and Differences
• Average Cost and Marginal Cost in Microeconomics
• Microeconomics: Definition, Uses, and Key Concepts
• Neoclassical Theory and the Teaching of Undergraduate Microeconomics
• Microeconomics of Regulation: Impact on Market Outcomes
• Normative Microeconomics and the Social Contract
• What Is Microeconomics: An Overview of Its Concepts
• Microeconomics of Competition and Monopolistic Behavior
• On the Reappraisal of Microeconomics: Economic Growth and Change in a Material World
• Microeconomic Justification of the Hoarding Function
• Quantitative Tools for Microeconomic Policy Analysis
• Microeconomics of Exchange Rates: Impact on Trade
• Principles of Microeconomics: Competitive Markets
• Microeconomics of Social Welfare Programs: Efficiency and Equity

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65 microeconomic topics you can choose from.

June 30, 2021

The competitive economy is driving everything in today’s world; that is why it becomes tricky to choose microeconomic topics for essay writings. However, there are plenty of microeconomic topics to write about if you perform proper research.

Students who are interested in microeconomic research topics are encouraged to dig deeper into the area of their interest. Learn and grasp the concepts before you choose a topic so that you have a better understanding of the complexities of that topic.

For any essay writer, it is vital to invest time in online research before selecting the topic. Choose the topic after due consideration as it should suit your skills and knowledge. We have gathered a list of microeconomic essay topics that range from basic topics with broad scope to specific ones.

What Are Microeconomic Essay Topics?

Before we proceed, we strongly recommend having a clear understanding of what microeconomic topics are. Microeconomics is a branch of science that encompasses a large variety of topics, so it may be a challenging task to find the best one for you. We have written this guide to help you with a lot of interesting microeconomic topics ideas.

Microeconomics is a field of economic science with a strong emphasis on scientific research that can help economists to predict economic tendencies. This can be achieved by knowing how the market will react to predictable purchasing decisions.

Well-researched microeconomic research topics can be used for a number of purposes; for instance, microeconomic topics for presentation, microeconomics papers topics for monopoly, microeconomic theory topics, microeconomic current event topics and whatnot.

Purpose of Writing an Essay on Microeconomics

If you are new in this field, it can be tricky to understand the scope and reasons for writing a research paper on microeconomics. The purpose is to integrate and use the maths tools and concepts that the students learn during their study.

Don’t forget that the success of your writing depends on the variety of factors in which choosing the right topic for research is the most prime factor. A know-how of the present economic conditions of the world will help in choosing a current and relevant topic.

Basic Requirements for Selecting a Microeconomic Topic

Ready to start looking for an interesting microeconomic topic for your essay writing? Here are some key principles that must be taken into consideration before selecting a topic:

The topic should be interesting for the reader and also for you. It should be broad enough to find the necessary material. The scope should be manageable within your essay deadline. It should be flexible enough to help you in composing an argumentive essay.

Microeconomic Topics To Begin Your Writing

If you are stuck while searching for the right microeconomic topic to write about, you have landed at the right place. We have gathered a long list of microeconomic research topics. So, here is a list of well-researched essay writing ideas:

• The impact of supply and demand on prices
• How does the economy change with the change of seasons?
• How do different microeconomic market structures influence supply?
• The influence of labor market and labor union on demand and supply
• How does the purchasing ability of consumers affect the pricing system?
• The use of advertising in microeconomics and how it influences the decisions of customers?
• What are the advantages and disadvantages of initiating a venture in the modern market?
• Does the price of health care influence taxes?
• The microeconomic problems and their relation with pollution
• Why is nature the largest victim of industrialization, and how it creates an impact on the economy?
• The impact of ecological costs on the principles of industry location
• The economic struggle for maximum utilization of natural resources and its reasons

Microeconomic Topics for Presentation

• Economic influences of trade
• Effects of oil prices on the economy
• How will current fluctuation influence the economy?
• The role of a government in boosting the economy
• Influence of unchecked population growth on the economy
• Increasing prices of commodities and the decreasing inflation rates
• Effect of imports on the local economy
• Impact of small businesses on economic development
• Managing unpredicted effects of exchange rates on economic growth
• Economic development in the digital era
• Effect of monetary policies on the economy
• How America’s interest rates affect the world economy?
• Role of the American economy in shaping global economic trends
• Inflation Rates: Revision method of computing

More Detailed Microeconomic Paper Topics

• How does government policy affect microeconomics?
• Correlation between productivity and economic growth
• Business decision making and the importance of microeconomics
• Deadweight loss and its connection to taxes
• Why does a minimum wage result in unemployment?
• Information technology and its significance for the economic development
• Pros and cons of risk pooling
• Marginal profitability and marginal resource costs
• Commodity relations and money as one of its forms
• How can a small business get out of debt?
• Market failure and need for government intervention
• Social imbalance: the difference between wealth and income
• Significance of market speculation and its economic benefit
• How should sellers and buyers share the tax burden?

Microeconomic Topics for Research

• Essence, types, sources, and consequences of inflation
• How changes in income affect consumer choices
• Concept of market equilibrium
• Perfect competition and the cases of homogeneous products
• Fair value vs. market value
• What are the factors that influence international pricing system?
• Barriers to entry and their impact on market competition
• Revenue maximization from the macroeconomic viewpoint
• How does minimum wage influence market equilibrium?
• Do luxury goods follow the law of demand?

Microeconomic Theory Topics

• The influence of game theory on economic theory
• Law of diminishing returns in the manufacturing industry
• Basics of anti-monopolistic regulation
• Theory of firm under perfect competition
• The theory of production in the new era
• Major principles of the economic welfare theory

Microeconomic Paper Topics on Monopoly

• Monopolistic behavior in the modern market structures
• Modern economy and the influence of oligopolies
• Market monopolization in France: main challenges
• Natural monopolies and regulation of its activities in the USA and foreign countries

Microeconomic Topics in the News

• How does advertising influences purchasing decisions?
• How can advertising be used within microeconomics for maximum benefits?
• The role of social media marketing in stimulating supply
• What are the problems of advertising that can lead to the closure of the company?
• Effects of extended lockdowns on microeconomic policies

We hope that this guide will help you choose the right microeconomic topic to make your research impressive!

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Microeconomics: Essay on Microeconomics

Microeconomics studies the economic actions and behaviour of individual units and small groups of individual units.

In microeconomic theory we discuss how the various cells of economic organism, that is, the various units of the economy such as thousands of consumers, thousands of producers or firms, thousands of workers and resource suppliers in the economy do their economic activities and reach their equilibrium states.

“Microeconomics consists of looking at the economy through a microscope, as it were, to see how the millions of cells in the body economic-the individuals or households as consumers, and the individuals or firms as producers—play their part in the working of the whole economic organism.”- Professor Lerner.

In other words, in microeconomics we make a microscopic study of the economy. But it should be remembered that microeconomics does not study the economy in its totality. Instead, in microeconomics we discuss equilibrium of innumerable units of the economy piecemeal and their inter-relationship to each other.

For instance, in microeconomic analysis we study the demand of an individual consumer for a good and from there go on to derive the market demand for the good (that is, demand of a group of individuals consuming a particular good). Likewise, microeconomic theory studies the behaviour of the individual firms in regard to the fixation of price and output and their reactions to the changes in the demand and supply conditions. From there we go on to establish price-output fixation by an industry (Industry means a group of firms producing the same product).

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Thus, microeconomic theory seeks to determine the mechanism by which the different economic units attain the position of equilibrium, proceeding from the individual units to a narrowly defined group such as a single industry or a single market. Since microeconomic analysis concerns itself with narrowly defined groups such as an industry or market.

However it does not study the totality of behaviour of all units in the economy for any particular economic activity. In other words, the study of economic system or economy as a whole lies outside the domain of microeconomic analysis.

Microeconomic Theory Studies Resource Allocation, Product and Factor Pricing :

Microeconomic theory takes the total quantity of resources as given and seeks to explain how they are allocated to the production of particular goods. It is the allocation of resources that determines what goods shall be produced and how they shall be produced. The allocation of resources to the production of various goods in a free-market economy depends upon the prices of the various goods and the prices of the various factors of production.

Therefore, to explain how the allocation of resources is determined, microeconomics proceeds to analyse how the relative prices of goods and factors are determined. Thus the theory of product pricing and the theory of factor pricing (or the theory of distribution) falls within the domain of microeconomics.

The theory of product pricing explains how the relative prices of cotton cloth, food grains, jute, kerosene oil and thousands of other goods are determined. The theory of distribution explains how wages (price for the use of labour), rent (payment for the use of land), interest (price for the use of capital) and profits (the reward for the entrepreneur) are determined. Thus, the theory of product pricing and the theory of factor pricing are the two important branches of microeconomic theory.

Prices of the products depend upon the forces of demand and supply. The demand for goods depends upon the consumers’ behaviour pattern, and the supply of goods depends upon the conditions of production and cost and the behaviour pattern of the firms or entrepreneurs. Thus the demand and supply sides have to be analysed in order to explain the determination of prices of goods and factors. Thus the theory of demand and the theory of production are two subdivisions of the theory of pricing.

Microeconomics as a Study of Economic Efficiency:

Besides analysing the pricing of products and factors, and the allocation of resources based upon the price mechanism, microeconomics also seeks to explain whether the allocation of resources determined is efficient. Efficiency in the allocation of resources is attained when the resources are so allocated that maximises the satisfaction of the people.

Economic efficiency involves three efficiencies; efficiency in production, efficiency in distribution of goods among the people (This is also called efficiency in consumption) and allocative economic efficiency, that is, efficiency in the direction of production. Microeconomic theory shows under what conditions these efficiencies are achieved. Microeconomics also shows what factors cause departure from these efficiencies and result in the decline of social welfare from the maximum possible level.

Economic efficiency in production involves minimisation of cost for producing a given level of output or producing a maximum possible output of various goods from the given amount of outlay or cost incurred on productive resources. When such productive efficiency is attained, then it is no longer possible by any reallocation of the productive resources or factors among the production of various goods and services to increase the output of any good without a reduction in the output of some other good.

Efficiency in consumption consists of distributing the given amount of produced goods and services among millions of the people for consumption in such a way as to maximize the total satisfaction of the society. When such efficiency is achieved it is no longer possible by any redistribution of goods among the people to make some people better off without making some other ones worse off. Allocative economic efficiency or optimum direction of production consists of producing those goods which are most desired by the people, that is, when the direction of production is such that maximizes social welfare.

In other words, allocative economic efficiency implies that pattern of production (i.e., amounts of various goods and services produced) should correspond to the desired pattern of consumption of the people. Even if efficiencies in consumption and production of goods are present, it may be that the goods which are produced and distributed for consumption may not be those preferred by the people.

There may be some goods which are more preferred by the people but which have not been produced and vice versa. To sum up, allocative efficiency (optimum direction of production) is achieved when the resources are so allocated to the production of various goods that the maximum possible satisfaction of the people is obtained.

Once this is achieved, then by producing some goods more and others less by any rearrangement of the resources will mean loss of satisfaction or efficiency. The question of economic efficiency is the subject-matter of theoretical welfare economics which is an important branch of microeconomic theory.

That microeconomic theory is intimately concerned with the question of efficiency and welfare is better understood from the following remarks of A. P. Lerner, a noted American economist. “In microeconomics we are more concerned with the avoidance or elimination of waste, or with inefficiency arising from the fact that production is not organised in the most efficient possible manner.

Such inefficiency means that it is possible, by rearranging the different ways in which products are being produced and consumed, to get more of something that is scarce without giving up any part of any other scarce item, or to replace something by something else that is preferred. Microeconomic theory spells out the conditions of efficiency (i.e., for the elimination of all kinds of inefficiency) and suggests how they might be achieved. These conditions (called Pareto-optimal conditions) can be of the greatest help in raising the standard of living of the population.”

The four basic economic questions with which economists are concerned, namely:

(1) What goods shall be produced and in what quantities,

(2) How they shall be produced,

(3) How the goods and services produced shall be distributed, and

(4) Whether the production of goods and their distribution for consumption is efficient fall within the domain of microeconomics.

The whole content of microeconomic theory is presented in the following chart:

Microeconomics and the Economy as a whole:

It is generally understood that microeconomics does not concern itself with the economy as a whole and an impression is created that microeconomics differs from macroeconomics in that whereas the latter examines the economy as a whole; the former is not concerned with it. But this is not fully correct. That microeconomics is concerned with the economy as a whole is quite evident from its discussion of the problem of allocation of resources in the society and judging the efficiency of the same.

Both microeconomics and macroeconomics analyse the economy but with two different ways or approaches. Microeconomics examines the economy, so to say, microscopically, that is, it analyses the behaviour of individual economic units of the economy, their inter-relationships and equilibrium adjustment to each other which determine the allocation of resources in the society. This is known as general equilibrium analysis.

No doubt, microeconomic theory mainly makes particular or partial equilibrium analysis, that is, the analysis of the equilibrium of the individual economic units, taking other things remaining the same. But microeconomic theory, as stated above, also concerns itself with general equilibrium analysis of the economy wherein it is explained how all the economic units, various product markets, various factor markets, money and capital markets are interrelated and interdependent to each other and how through various adjustments and readjustments to the changes in them, they reach a general equilibrium, that is, equilibrium of each of them individually as well as collectively to each other.

Professor A. P. Lerner rightly points out, “Actually microeconomics is much more intimately concerned with the economy as a whole than is macroeconomics, and can even be said to examine the whole economy microscopically. We have seen how economic efficiency is obtained when the “cells” of the economic organism, the households and firms, have adjusted their behaviour to the prices of what they buy and sell. Each cell is then said to be in equilibrium.’ But these adjustments in turn affect the quantities supplied and demanded and therefore also their prices. This means that the adjusted cells then have to readjust themselves. This in turn upsets the adjustment of others again and so on. An important part of microeconomics is examining whether and how all the different cells get adjusted at the same time. This is called general equilibrium analysis in contrast with particular equilibrium or partial equilibrium analysis. General equilibrium analysis is the microscopic examination of the inter-relationships of parts within the economy as a whole. Overall economic efficiency is only a special aspect of this analysis.”

Importance and Uses of Microeconomics:

Microeconomics occupies a vital place in economics and it has both theoretical and practical importance. It is highly helpful in the formulation of economic policies that will promote the welfare of the masses. Until recently, especially before Keynesian Revolution, the body of economics consisted mainly of microeconomics. In spite of the popularity of macroeconomics these days, microeconomics retains its importance, theoretical as well as practical.

It is microeconomics that tells us how a free-market economy with its millions of consumers and producers works to decide about the allocation of productive resources among the thousands of goods and services. As Professor Watson says, “microeconomic theory explains the composition or allocation of total production, why more of some things are produced than of others.”

He further remarks that microeconomic theory “has many uses. The greatest of these is depth in understanding of how a free private enterprise economy operates.” Further, it tells us how the goods and services produced are distributed among the various people for consumption through price or market mechanism. It shows how the relative prices of various products and factors are determined, that is, why the price of cloth is what it is and why the wages of an engineer are what they are and so on.

Moreover, as described above, microeconomic theory explains the conditions of efficiency in consumption and production and highlights the factors which are responsible for the departure from the efficiency or economic optimum. On this basis, microeconomic theory suggests suitable policies to promote economic efficiency and welfare of the people.

Thus, not only does microeconomic theory describe the actual operation of the economy, it has also a normative role in that it suggests policies to eradicate “inefficiency” from the economic system so as to maximize the satisfaction or welfare of the society. The usefulness and importance of microeconomics has been nicely stated by Professor Lerner.

He writes, “Microeconomic theory facilitates the understanding of what would be a hopelessly complicated confusion of billions of facts by constructing simplified models of behaviour which are sufficiently similar to the actual phenomena to be of help in understanding them. These models at the same time enable the economists to explain the degree to which the actual phenomena depart from certain ideal constructions that would most completely achieve individual and social objectives.

They thus help not only to describe the actual economic situation but to suggest policies that would most successfully and most efficiently bring about desired results and to predict the outcomes of such policies and other events. Economics thus has descriptive, normative and predictive aspects.”

We have noted above that microeconomics reveals how a decentralised system of a free private enterprise economy functions without any central control. It also brings to light the fact that the functioning of a complete centrally directed economy with efficiency is impossible. Modern economy is so complex that a central planning authority will find it too difficult to get all the information required for the optimum allocation of resources and to give directions to thousands of production units with various peculiar problems of their own so as to ensure efficiency in the use of resources.

To quote Professor Lerner again, “Microeconomics teaches us that completely ‘direct’ running of the economy is impossible—that a modern economy is so complex that no central planning body can obtain all the information and give out all the directives necessary for its efficient operation.

These would have to include directives for adjusting to continual changes in the availabilities of millions of productive resources and intermediate products, in the known methods of producing everything everywhere, and in the quantities and qualities of the many items to be consumed or to be added to society’s productive equipment.

The vast task can be achieved, and in the past has been achieved, only by the development of a decentralised system whereby the millions of producers and consumers are induced to act in the general interest without the intervention of anybody at the centre with instructions as to what one should make and how and what one should consume.

Microeconomic theory shows that welfare optimum of economic efficiency is achieved when there prevails perfect competition in the product and factor markets. Perfect competition is said to exist when there are so many sellers and buyers in the market so that no individual seller or buyer is in a position to influence the price of a product or factor.

Departure from perfect competition leads to a lower level of welfare, that is, involves loss of economic efficiency. It is in this context that a large part of microeconomic theory is concerned with showing the nature of departures from perfect competition and therefore from welfare optimum (economic efficiency). The power of giant firms or a combination of firms over the output and price of a product constitutes the problem of monopoly.

Microeconomics shows how monopoly leads to misallocation of resources and therefore involves loss of economic efficiency or welfare. It also makes important and useful policy recommendations to regulate monopoly so as to attain economic efficiency or maximum welfare. Like monopoly, monopsony (that is, when a single large buyer or a combination of buyers exercises control over the price) also leads to the loss of welfare and therefore needs to be controlled.

Similarly, microeconomics brings out the welfare implications of oligopoly (or oligopsony) whose main characteristic is that individual sellers (or buyers) have to take into account, while deciding upon their course of action, how their rivals react to their moves regarding changes in price, product and advertising policy.

Another class of departure from welfare optimum is the problem of externalities. Externalities are said to exist when the production or consumption of a commodity affects other people than those who produce, sell or buy it. These externalities may be in the form of either external economies or external diseconomies. External economies prevail when the production or consumption of a commodity by an individual benefits other individuals and external diseconomies prevail when the production or consumption of a commodity by him harms other individuals.

Microeconomic theory reveals that when the externalities exist free working of the price mechanism fails to achieve economic efficiency, since it does not take into account the benefits or harms made to those external to the individual producers and the consumers. The existence of these externalities requires government intervention for correcting imperfections in the price mechanism in order to achieve maximum social welfare.

Several Practical Applications of Microeconomics for Formulating Economic Policies :

Microeconomic analysis is also usefully applied to the various applied branches of economics such as Public Finance, International Economics. It is the microeconomic analysis which is used to explain the factors which determine the distribution of the incidence or burden of a commodity tax between producers or sellers on the one hand and the consumers on the other.

Further, microeconomic analysis is applied to show the damage done to the social welfare or economic efficiency by the imposition of a tax. If it is assumed that resources are optimally allocated or maximum social welfare prevails before the imposition of a tax, it can be demonstrated by microeconomic analysis that what amount of the damage will be caused to the social welfare.

The imposition of a tax on a commodity (i.e., indirect tax) will lead to the loss of social welfare by causing deviation from the optimum allocation of resources the imposition of a direct tax (for example, income tax) will not disturb the optimum resource allocation and therefore will not result in loss of social welfare. Further, microeconomic analysis is applied to show the gain from international trade and to explain the factors which determine the distribution of this gain among the participant countries.

Besides, microeconomics finds application in the various problems of international economics. Whether devaluation will succeed in correcting the disequilibrium in the balance of payments depends upon the elasticity’s of demand and supply of exports and imports. Furthermore, the determination of the foreign exchange rate of a currency, if it is free to vary, depends upon the demand for and supply of that currency. We thus see that microeconomic analysis is a very useful and important branch of modern economic theory.

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105 Microeconomics Research Topics

Table of Contents

Looking for good microeconomics research paper topics for your college project?

The purpose of writing a paper in microeconomics is to integrate and apply the mathematical tools and important concepts that students study during the semester. Instructors evaluate such papers taking into account their originality and the quality of the economic analysis performed by the students.

Choosing an impressive topic for research is the first very important step in academic writing because the success of a college research paper depends on a variety of factors and the choice of the right topic for research is one of them.

The topic should be interesting for both you and your reader, broad enough to find necessary material and at the same time manageable.

Microeconomics is a branch of science that covers a large variety of topics so it may be challenging to find the best one, especially if you have just started the class.

We would like to help you and have gathered here 100+ powerful topics for doing research in microeconomics.

Microeconomics research topics

Microeconomics studies the economic behavior of individual isolated units of the economy, such as a specific person, a household, a company or an industry. This field of study deals with factors that influence individual economic choices. Actually, it’s the study of markets and their key elements – supply and demand at the personal and corporate level and scarcity of goods. Microeconomics analyzes the markets and determines the prices for services and goods that best allocate limited resources.

In simple words, this branch of science studies how people make decisions when they know that they don’t have all the money and time in the world to buy all products and services and to manufacture everything. Microeconomics investigates how our behaviors and decisions influence the supply and demand for products and services, which determines how much money we pay for them. In turn, the prices for goods determine their quantities of supplies by companies and demanded by ordinary consumers. As you see, decisions made by businesses and individual consumers are motivated by their considerations about cost and benefit.

Microeconomics covers a wide variety of topics, for example, supply and demand, opportunity cost, elasticity, market structures, the theory of production, entrepreneurship, labor market, pricing etc. These large research paper writing topics include a lot of subtopics, and you can choose them for your research.

Take a look at this shortlist:

• Inflation: essence, types, sources, consequences.
• The impact of game theory on economic theory.
• What is the effect of labor force participation on the economy and budget?
• How income changes affect consumer choices.
• Benefits of the opportunity cost approach to individual decision making.
• Examples of homogeneous products in perfect competition.
• Impact of marital status on the labor force composition.
• Concept of market equilibrium.
• Impact of price on consumer buying behavior.
• How does advertising affect price elasticity?
• Impact of household, nature and industry conditions on microeconomic models.
• Do luxury goods follow the law of demand?
• How important is cross elasticity of demand?
• Razor and blades business model.
• What factors can influence the pricing system?
• Why is studying tax incidence important for determining the equity of a tax system?
• Compare the marketing strategies of Pepsi and Coca Cola.
• Why are network effects important?
• Barriers to entry and their effect on market competition.
• Fair value vs market value.
• Strategies of product differentiation.
• Harmful impacts of cartels on consumers.
• Is unemployment microeconomics or macroeconomics concept?
• Causes of China’s consumer inflation.
• Using microeconomics to maximize revenue.
• Dynamics of the Gini index as a reflection of the problem of inequality in income distribution.
• Startups and depression: the dark side of entrepreneurship.
• Conspicuous consumption in the market for smartphones.
• Starting a business: how do entrepreneurs handle risk?
• How do firms use the long-run average cost curve in their planning?
• Businesses without offices – is this the way forward?
• Coca Cola supply and demand analysis.
• Difference between opportunity cost and implicit cost.
• How do labor markets work?
• How does minimum wage affect market equilibrium?

Microeconomics term paper topics

Term papers in microeconomics are actually extended essays that allow students to examine the most important concepts and analyze specific issues.

When writing term papers in microeconomics, students can demonstrate their ability to provide a logical argument, to critically analyze existing literature, and to determine empirical problems.

That’s why need to select an effective microeconomics research topic that will allow you to show your skills and help you impress your professor. Here are 35 original topic ideas you can choose for your essays and term papers.

• How can small businesses get out of debt?
• Strategies for avoiding small business bankruptcy.
• Why does a minimum wage result in unemployment?
• How does government policy impact microeconomics?
• Why do taxes cause deadweight loss?
• Social investment and the Matthew effect.
• Medical cost containment: a microeconomic approach.
• Importance of microeconomics in business decision making.
• What are the disadvantages of a strike for employees?
• Pros and cons of part-time work.
• Reasons why economies strive for maximal usage of natural resources.
• Productivity and economic growth.
• Role of information technology in economic development.
• Productive efficiency and allocative efficiency in perfect competition.
• Describe the impact of the rise in income on normal and inferior goods.
• Social inequality: the difference between wealth and income.
• Trading venues and market infrastructure.
• Role of innovative entrepreneurs in economic theory.
• Importance of market segmentation in healthcare.
• Money as a developed form of commodity relations.
• How to increase the working capital turnover ratio.
• Market failure and government intervention.
• Fixed and circulating capital economics.
• Losses from monopoly: theory and practice.
• Importance of intellectual property rights.
• Effects of bureaucracy on customers and employees.
• Importance of market speculation and its economic benefit.
• Consumer reaction to changes in income and prices.
• Advantages and disadvantages of risk pooling.
• Why is insurance necessary for the economic development of a country?
• Marginal profitability and marginal resource costs.
• Influence of trade unions on the labor market.
• Normal, inferior, necessary, and luxury goods.
• How is the tax burden shared between buyers and sellers?
• Walras equilibrium vs Marshall equilibrium.

Microeconomics term papers

Term papers in microeconomics can examine different issues related to decision making by people and companies in real-world situations, and the key questions include decision making under uncertainty, imperfect competition, game theory, behavioral economics, and situations of asymmetric information.

Here are 35 topic ideas for your inspiration.

• Advantages and disadvantages of hiring full-time workers for business.
• Changes in equilibrium price and quantity.
• Price and output determination under non-collusive oligopoly.
• Discounted and non-discounted capital budgeting.
• Impact of taxes and subsidies on market equilibrium.
• Properties of Cobb-Douglas production function.
• Why do economists regard normal profit as a cost?
• Renewable resources: the impact of green energy on the economy.
• Price discrimination and monopolistic competition.
• Cournot competition vs Bertrand competition.
• Income inequality. Relationship between Lorenz curve and Gini coefficient.
• Pareto optimality in environmental economics.
• Limit utility and Gossen’s laws.
• Consumer preferences and budget constraints.
• Advertising: economic efficiency and public interest.
• Role of financial intermediaries.
• Circular economy and its benefits for society.
• Accounting profit vs economic profit.
• Consumer’s equilibrium through indifference curve analysis.
• Economic rent and transfer earnings.
• Impact of a price ceiling on the market.
• Theory of firm under perfect competition.
• Government intervention inland market.
• Theory and practice of anti-monopolistic regulation.
• Small business in a market economy: value, problems, prospects.
• Asymmetric information and adverse market selection.
• Analyze the main customer trends in your area.
• Explicit and implicit costs and accounting and economic profit.
• Sources of financing in a commercial enterprise.
• Law of diminishing returns in manufacture.
• Is Mcdonald’s a monopolistic competition?
• What can lead a company to success?
• First mover advantage in e-commerce.
• The concentration of production in sectors of the domestic industry.
• How to improve the profitability of a small store?

Now you have more than 100 interesting microeconomics term paper topics to choose from. Feel free to use any of them for writing your own essays and term papers.

You can choose any of them and use it as it is here without any changes or start own research to make the topic you like more narrow and manageable.

Whichever approach you select, we hope that our useful list will help you create an awesome project and get a high grade.

No time to complete a perfect paper on microeconomics? Hand it to a trained pro! Several clicks and your essay is on the way to you.

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