ROLE OF MICROECONOMICS Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Microeconomics (from the Greek prefix mikro- meaning "small") is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions between these individuals and businesses.[1] [2] [3] One of the goals of microeconomics is to analyze the market mechanisms that establish relative prices between goods and services and to allocate limited resources among alternative uses. Microeconomics shows the conditions under which free markets lead to desirable allocations. It also analyzes market failure, where markets fail to produce efficient outcomes. Microeconomics is contrasted with macroeconomics, which involves "the sum total of economic activity, dealing with the problems of growth, inflation, and unemployment, and with national policies relating to these problems." ".[2] Microeconomics is also concerned with the effects of economic policies (such as changing levels of taxation) on the above-mentioned aspects of the economy.[4] Particularly in the wake of Lucas's critique, much of modern macroeconomic theory was built on “micro foundations,” that is, basic assumptions about micro-level behavior. In this chapter, you will learn about: Voter participation and the costs of elections. Special interest. Politics. Flaws in the democratic system of government. As President Abraham Lincoln said in his speech. in Gettysburg del 1863, democratic governments should be "of the people, by the people, and for the people." Can we rely on democratic governments to adopt sensible economic policies? After all, they react to voters, not to analyzes of supply and demand curves he main objective of an economics course is, of course, to analyze the characteristics of markets and purely economic institutions. But political institutions also play a role in allocating society's scarce resources, and economists have played an active role, along with other social scientists, in analyzing the functioning of such political institutions. Other chapters in this book discuss situations in which market forces can sometimes lead to undesirable outcomes: monopoly, imperfect competition, and antitrust policy; negative and positive externalities; poverty and income inequality; failure to provide insurance; and financial markets that could go from boom to bust. Many of these chapters suggest that government economic policies could be aimed at addressing these problems. However, just as markets can address issues and problems that lead to undesirable outcomes, a democratic system of government can also make mistakes, either by implementing policies that fail to benefit society as a whole or by failing to implement policies that would have benefited society as a whole. This chapter discusses some practical difficulties of democracy from an economic point of view: the actors of the political system are assumed to pursue their own personal interest, which does not necessarily coincide with the public good. For example, many of those who have the right to vote do not do so, which obviously raises questions about the ability of a democratic system to reflect everyone's interests. The benefits or costs of government action are sometimes concentrated on small groups, who in some cases may organize and have a disproportionately large impact on policy and in other cases may fail to organize and end up being overlooked. A legislator who yes.