What does microeconomics focus on?

Microeconomics focuses on the behaviors of individuals and firms within an economy. It examines how these entities make decisions regarding the allocation of resources, pricing of goods and services, and how they interact in markets. By analyzing individual and firm-level behavior, microeconomics seeks to understand the mechanisms that drive supply and demand, consumer choice, and production processes. This branch of economics helps explain how local economies function and how they respond to changes in various factors such as price changes, consumer preferences, and market structures.

In contrast, the other options pertain to topics outside the scope of microeconomics. The behavior of governments and aggregate economic indicators relate more to macroeconomics, which studies the economy as a whole rather than individual components. Similarly, overall economic growth is a macroeconomic concept that looks at the broader economic performance across entire sectors or economies, rather than the detailed behaviors of specific individuals or firms.