Which branch of economics studies individual and firm behaviors?

Microeconomics is the branch of economics that focuses on the behaviors of individual consumers and firms. It examines how these entities make decisions regarding resource allocation, pricing, and consumption. By analyzing the interactions between buyers and sellers in specific markets, microeconomics explores concepts such as supply and demand, elasticity, and market equilibrium. This area of study helps to understand how various factors influence the choices of individuals and businesses, and how these choices affect the overall economy at a smaller scale.

In contrast, other branches such as macroeconomics look at the economy as a whole, focusing on aggregate measures like national income and economic growth, which do not typically address the decisions made by individual agents or firms. Behavioral economics, while interested in decision-making processes, often integrates psychological insights into economic theory and does not exclusively study individual and firm behaviors in the traditional sense. International economics, on the other hand, deals with economic interactions between countries and the impacts of trade, rather than the behaviors of individual consumers and firms within a single economy. This delineation underscores why microeconomics is the appropriate answer.