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Essay from the year 2017 in the subject Economics - Micro-economics, grade: 2,0, University of Bratislava, language: English, abstract: The question about how the different economic units such as consumers, governments, and enterprises operate in a competitive markets und make the decisions under conditions of limited amounts of resources is a main subject of studies of the economic science. The lack of resources has turned into a vexed problem in recent years, while people's desires keep increasing. In order to deal with such a conflict, these three basic questions should be answered by economic systems: What services and goods should be produced and in what quantities? How should these services and goods be produced? Who would be the end customers of such services und goods and how should these should be distributed? Microeconomic theory defines and models an economic activity as an interaction of individuals (economic agents) pursuing their private interests. Considering different microeconomic processes for better understanding the principles of the whole economy we are interested in how the goods are distributed among consumers within different markets. What condition markets' outcomes, i.e. prices of goods and services and quantities traded, are agents' behavioral characteristics and the market mechanisms, described of law of supply and demand. It is common to divide two large and groups of agents - households and firms, each of them plays its own role in the market.
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