Microeconomics
Microeconomics is the branch of economic theory that deals with behavior and decision making by small units such as individuals and firms.
Markets
A gathering of people for the purchase and sale of goods and services.
Households
Basic unit of consumers consisting of all people who live in a house, apartment, or separate living quarters.
Business
A commercial house or firm.
Circular Flow
The continuing and recurrent transfers of money and goods among producers and consumers. Money goes back and forth through the economy in a nonstop flow.
Functions of Money
Money has many uses in today's society. It is used as a medium of exchange, store of value, and a standard of value. Before the use of money people would barter. The only problem with bartering is it would have to be a voluntary exchange. Also that certain goods may lose value as well as people not knowing how much other goods and services may cost because there was no standard of value.
Barter
Situation in which people trade goods and services without using money.
Voluntary Exchange
Specialization of producing one good or service and then trade for other goods and services.