whether to work, and if so, whether to work full time or part time? How do people decide how much to save for

the future, or whether they should borrow to spend beyond their current means?

What determines the products, and how many of each, a firm will produce and sell? What determines the
16 1 • Welcome to Economics!

prices a firm will charge? What determines how a firm will produce its products? What determines how many

workers it will hire? How will a firm finance its business? When will a firm decide to expand, downsize, or even

close? In the microeconomics part of this book, we will learn about the theory of consumer behavior, the

theory of the firm, how markets for labor and other resources work, and how markets sometimes fail to work

properly.

Macroeconomics

What determines the level of economic activity in a society? In other words, what determines how many goods
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