Villain is loose and doesn't raise much pre-flop. Not majorly aggressive or passive.

Party Poker 1/2 Hold'em (6 max, 5 handed)

Preflop: Hero is UTG with , .
Hero raises, 1 fold, Button calls, 2 folds.

Flop: (5.50 SB) , , (2 players)
Hero bets, Button raises, Hero folds.

Final Pot: 4.25 BB

I was going on the "in small pots, if the decision is close between continuing and folding, tend to fold" concept. My a-high could have been good at the moment. But if I miss my AK and he has an OESD, he can either pair up, or hit his OESD. If he has a set, I'm drawing dead. If he has a small overpair, then all my overcard outs are clean and I barely have the odds to continue.

Let me see what PokerStove says:

Board: 7h 4d 6c
equity (%) win (%) tie (%)
Hand 1: 47.7778 % 47.78% 00.00% { AsKs }
Hand 2: 52.2222 % 52.22% 00.00% { 9d8d }

Board: 7h 4d 6c
equity (%) win (%) tie (%)
Hand 1: 20.8081 % 20.00% 00.81% { AsKs }
Hand 2: 79.1919 % 78.38% 00.81% { 5c5d }

Board: 7h 4d 6c
equity (%) win (%) tie (%)
Hand 1: 21.9192 % 21.52% 00.40% { AsKs }
Hand 2: 78.0808 % 77.68% 00.40% { 8c8d }

Board: 7h 4d 6c
equity (%) win (%) tie (%)
Hand 1: 70.9091 % 69.39% 01.52% { AsKs }
Hand 2: 29.0909 % 27.58% 01.52% { JdTd }

Board: 7c 4h 6d
equity (%) win (%) tie (%)
Hand 1: 59.3434 % 58.59% 00.76% { AsKs }
Hand 2: 40.6566 % 39.90% 00.76% { Td9d }

Okay... so that was fun. If he has an overpair like 88, I'm in a lot of trouble. A set and I'm drawing dead. A straight and I'm drawing dead. Two-pair and I'm drawing slim. Unless he's bluffing or only has a gutshot, I'm either drawing dead, drawing slim, or am only a coin-flip to win.

Without a read on my opponent, and a pot this small, do you agree folding was the right play?

what about if he has A7 or something.

folding is the right play imo.

I'd fold here as well.

I am curious why you led out after the flop instead of checking, though. Is it because you raised pre-flop?

I led because he could just as easily have KQ or JT or AX that missed and for all he knows I have TT+. Even if he knows I have AK, he shouldn't be calling with something like AJ since he knows he's drawing slim. If I check and let him bet, I have no idea where I stand.