Microeconomics You Must Know

I have done B.Tech from IIT Kharagpur and Masters in Quantitative Economics from Indian Statistical Institute. I work in the intersection of data science, economics and statistics.

The discussion in microeconomics can be started with the conception of what is there to buy in the market, it could be books, movies, food, etc. Given the preferences and what is available in the market, one can only buy the preferred goods if he/she has the required money, i.e, budget.

Given these things, a lot of mathematical analysis goes through and then there are a lot of market imperfections.

There is a lot of agent-based study done, i.e, Game Theory when there is a strategic interaction between agents. It is a very interesting part of microeconomics.

Let's take a behavioural aspect of Microeconomics : 

Market for Lemons
There is a very interesting concept in microeconomics, called Market for Lemons. It is the economics of asymmetric information. Suppose that you go to a used car market or a shop and you have two kinds of Cars, one is a good and one is a bad. Obviously, in the beginning, you were unaware of the fact that the car is good or bad. So both of these cars will obviously have a hidden price now. The hidden price is hidden because you don’t know the type of the car. This computation can be done automatically that when one enters into a used car market, then he needs to average out the good and bad car. At the moment an individual averages out the good and bad prices, the price which you want to pay is sufficient for the bad car, but it is not sufficient for the good car. So, the good car sellers are not happy in the used car market, they do not have much of incentive to enter in a used car market unless there is a perfect price discovery. 

On studying microeconomics, it makes an individual gradually move towards psychology and behavioural economics. Now then the subject of economics becomes interesting. It no longer remains the usual political economy discussed in news which is generally considered as macroeconomics.