Question

Briefly describe the microeconomic role of government. Focus on economic efficiency arguments rather than personal judgments of equity. Be sure to mention the role of market failures.

Answer 1

The role of micro-economy is very important in the context of the government because of the following reasons.
Microeconomic policies of the government are totally based on the establishment of tax structure in the economy.
Microeconomic theory discovered the concept of demand and supply and their elasticity is and therefore it is very important for the establishment of a strong tax base in the economy.
It is essential for the domestic market and for the export essential commodities which are important to initialise the price Strategies for different companies and to control handled by the government for the protection and the establishment of the market as per the elasticity of demand.
The concept and theories of cost and revenue are also very important for the establishment of price policies in the economy.
The study of different market structures like the study of monopoly the study of monopolistic the study of oligopoly the study of duopoly and the study of perfect competition is very important for the establishment of pricing strategies in the economy.
The concept of consumer equilibrium and producers equilibrium and the theory based on these equilibrium conditions it is important to establish or price line in the economy for the government.
Focus on the economic efficiency arguments and the role of market failures in the context of macroeconomic policies of the government the market study provide a strong base to create a strong tax structure and the removal of antitrust in the economy.