Role of Mircroeconomics in Politics: [Essay Example], 808 words GradesFixer

Haven't found the right essay?

Get an expert to write you the one you need!


Professional writers and researchers


Sources and citation are provided


3 hour delivery

This essay has been submitted by a student. This is not an example of the work written by professional essay writers.

Role of Mircroeconomics in Politics

Download Print

Pssst… we can write an original essay just for you.

Any subject. Any type of essay.

We’ll even meet a 3-hour deadline.

Get your price

121 writers online

Download PDF


Microeconomics (from 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 among these individuals and firms.[1][2][3]

One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and allocate limited resources among alternative uses. Microeconomics shows conditions under which free markets lead to desirable allocations. It also analyzes market failure, where markets fail to produce efficient results.

Microeconomics stands in contrast to macroeconomics, which involves “the sum total of economic activity, dealing with the issues of growth, inflation, and unemployment and with national policies relating to these issues”.[2] Microeconomics also deals with the effects of economic policies (such as changing taxation levels) on the aforementioned aspects of the economy.[4] Particularly in the wake of the Lucas critique, much of modern macroeconomic theory has been built upon ’micro foundations’—i.e. based upon basic assumptions about micro-level behavior.

In this chapter, you will learn about:

  • Voter Participation and Costs of Elections
  • Special Interest Politics
  • Flaws in the Democratic System of Government

As President Abraham Lincoln famously said in his 1863 Gettysburg Address, democratic governments are supposed to be “of the people, by the people, and for the people.” Can we rely on democratic governments to enact sensible economic policies? After all, they react to voters, not to analyses of demand and supply curves. The main focus of an economics course is, naturally enough, 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 how such political institutions work.

Other chapters of this book discuss situations in which market forces can sometimes lead to undesirable results: monopoly, imperfect competition, and antitrust policy; negative and positive externalities; poverty and inequality of incomes; failures to provide insurance; and financial markets that may go from boom to bust. Many of these chapters suggest that government economic policies could be aimed at addressing these issues.

However, just as markets can face issues and problems that lead to undesirable outcomes, a democratic system of government can also make mistakes, either by enacting policies that do not benefit society as a whole or by failing to enact 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 in the political system are presumed to follow their own self-interest, which is not necessarily the same as the public good. For example, many of those who are eligible to vote do not, which obviously raises questions about whether a democratic system will reflect everyone’s interests. Benefits or costs of government action are sometimes concentrated on small groups, which in some cases may organize and have a disproportionately large impact on politics and in other cases may fail to organize and end up neglected. A legislator who worries about support from voters in his or her district may focus on spending projects specific to the district without sufficient concern for whether this spending is in the interest of the nation.

When more than two choices exist, the principle that the majority of voters should decide may not always make logical sense, because situations can arise where it becomes literally impossible to decide what the “majority” prefers. Government may also be slower than private firms to correct its mistakes, because government agencies do not face competition or the threat of new entry.

As the terms imply, Microeconomics focuses on micro or small segment of economy and it studies the decision making process and econtomic problems of individuals ( household, firm, industry etc) in an economy with respect to that how they use scarce means or resources at their disposal for satisfying their unlimted ends. On the other hand Macroeconomics looks at a larger picture and is study of economy as a whole.

In order to understand the concepts (Microeconomics and Macroeconomics) better, we can say that Microeconomics is the study of an individual human being, an individual household, an individual firm or an individual industry etc with respect to how they use/divide their given scarce means among the possible alternative uses/ends in order to maximize their gain or wellbeing. Microeconomic theory does not study the economy as a whole and instead studies the individuals and their gain maximizing behavior in any economy. Microeconomics studies and analyzes individual (human being, household, firm, industry etc.) behavior with respect to issues like production, consumption, distribution, price determination etc.

Macroeconomics on the other hand, studies the aggregate or overall economic behavior of households, firms, industries etc in any economy. It focuses on broader economic issues like business cycles, inlation, deflation, stagflation, issues related to economic growth and development, national income, employment, money and monetary policy, fiscal policy etc.

infoRemember: This is just a sample from a fellow student.

Your time is important. Let us write you an essay from scratch

100% plagiarism-free

Sources and citations are provided

Find Free Essays

We provide you with original essay samples, perfect formatting and styling

Cite this Essay

To export a reference to this article please select a referencing style below:

Role of Mircroeconomics in Politics. (2018, December 11). GradesFixer. Retrieved February 27, 2021, from
“Role of Mircroeconomics in Politics.” GradesFixer, 11 Dec. 2018,
Role of Mircroeconomics in Politics. [online]. Available at: <> [Accessed 27 Feb. 2021].
Role of Mircroeconomics in Politics [Internet]. GradesFixer. 2018 Dec 11 [cited 2021 Feb 27]. Available from:
copy to clipboard

Sorry, copying is not allowed on our website. If you’d like this or any other sample, we’ll happily email it to you.

    By clicking “Send”, you agree to our Terms of service and Privacy statement. We will occasionally send you account related emails.


    Attention! this essay is not unique. You can get 100% plagiarism FREE essay in 30sec

    Recieve 100% plagiarism-Free paper just for 4.99$ on email
    get unique paper
    *Public papers are open and may contain not unique content
    download public sample

    Sorry, we cannot unicalize this essay. You can order Unique paper and our professionals Rewrite it for you



    Your essay sample has been sent.

    Want us to write one just for you? We can custom edit this essay into an original, 100% plagiarism free essay.

    thanks-icon Order now

    Hi there!

    Are you interested in getting a customized paper?

    Check it out!
    Having trouble finding the perfect essay? We’ve got you covered. Hire a writer uses cookies. By continuing we’ll assume you board with our cookie policy.