Answer to Question #177287 in Microeconomics for Noreen

Question

Does microeconomics help government or policy makers to understand the system and to improve the conditions of society if yes then how? Give detail with arguments.    

Answer 1

It aids the government in the formulation of economic policies such as taxes, public spending, and price policy. These policies assist the government in achieving its objective of effective resource distribution and societal economic welfare.

Microeconomics also aids policymakers in analyzing and determining how efficient capital are distributed across different goods and services. It also aids in the producer's decision-making process about what to produce, how much to produce, and for whom to produce.