See the attachment Term Paper Example | Topics and Well Written Essays - 2000 words

See the attachment - Term Paper Example The Economists Dictionary of Economics defines Microeconomics as "The study of economics at the level of individual consumers, groups of consumers, or firms... The general concern of microeconomics is the efficient allocation of scarce resources between alternative uses but more specifically it involves the determination of price through the optimizing behavior of economic agents, with consumers maximizing utility and firms maximizing profit." Microeconomics is a field of economic study that focuses on how an individuals behavior and decisions affect the supply and demand for goods and services. For the purpose of microeconomics, the actions of individuals, households and businesses are crucial. One key element of microeconomics is price theory. Theoretically, all markets are perfectly competitive, with supply and demand driving prices. However, individuals and groups can directly affect the supply and demand of products and services. Labor economics, for example, is based largely on the analysis of the supply and demand for labor of different types. An economic theory contends that the price for any specific good/service is the relationship between the forces of supply and demand. The theory of price indicates that the point at which the benefit gained from the people that demanded the entity,   meets the sellers  marginal costs is the most optimal market price for the good/service. Labor is a measure of the work done by human beings. Labor economics seeks to understand the functioning and dynamics of the market for labor. Labor markets operate through the interaction of workers and employers. Labor economics looks at the suppliers of labor services (workers), the demands of labor services (employers), and attempts to understand the resulting pattern of wages, employment, and income(Freeman, 72-76). Market failure is a situation in which a market is inefficient in organizing