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ie Ost Said: ‘ ave Or do 1s aaa (even ie cart always get what you want.” ye simple fact of Jagger), that there are limits to what yo a life learned in early childhood. For economia eels the limited budgets and technical know-hoy, Ocate to anes and the limited number of hours in a weg, sap iic abor or leisure. But microeconomics 1s also aboy; Se limits. More precisely, it is about the allocation, ; . For allocate their ees ample, microeconomics explains how consumers Can best incomes to the various goods and services available fo, Purchase. It ° leisure, oe te mae how workers can best allocate their time to labor instead of allocate foe € job instead of another. And it explains how firms can best Rew machine financial resources to hiring additional workers versus buying ery, and to producing one set of products versus another. i relevance in those countries. Trade-Offs In modern market economies, consumers, workers, and firms have much more flexibility and choice when it comes to allocating scarce resources. Microeconomics describes the trade-offs that consumers, workers, and firms face, and shows how these trade-offs are best made. The idea of making optimal trade-offs is an important theme in microeconomics—one that you will encounter throughout this book. Let's look at it in more detail Consumers Consumers have limited incomes, which can variety of goods and services, or saved for the future. ee ject matter ‘¢ Chapters 3, 4, and 18 of this book, describes how f aaners ios on pe Pp ok maximize their well-being by trading off the purchase of more O — g for the purchase of less of others. We will also h consumers ecide how much of their incomes to save, thereb Se current consumption for future consumption. epee yteding of but less security. I week they wish tc Firms Firms als produce, and the is very good at p duce airplanes, ¢ financial resours these constraint duce. If it wants the year after, it or do both. Tr describes how | Prices and A second imp trade-offs dex or firms. For e his or her pre trade off labo labor—i.e., tt chase more 0 Microeco! planned ecor are determi interachons determine tl are affectec Motors, anc central role Say more ak Equilibr Microecon equilibriur dency to ¢ “best attai it ts unde only whe tion is fo 
