Which of the following best describes microeconomics?

Microeconomics focuses on the behavior of individual entities, such as consumers, households, and businesses, and how their decisions influence the allocation of resources and distribution of goods and services. It examines specific market mechanisms, the interactions between buyers and sellers, and the factors that affect supply and demand. This aspect of economics drills down into the micro-level interactions that shape economic outcomes, providing insights into how specific choices impact prices and production in particular markets.

Other choices explore broader concepts in economics. For instance, analyzing overall economic performance pertains more to macroeconomics, which looks at aggregate indicators like GDP, unemployment rates, and inflation. The option involving global economic relations refers to international economics, which studies trade flows, exchange rates, and global market dynamics. Finally, examining government fiscal policies relates to public finance and how government actions affect the economy as a whole. Each of these areas has its relevance but does not capture the essence of microeconomics, which is rooted in the granular details of decision-making at the individual and business levels.