Tag: micro and macro economics

Questions Related to micro and macro economics

Micro economics covers the study of ___________.
(i) Consumer's behaviour
(ii) Producer's equilibrium
(iii) Fiscal system of an economy
(iv) Factor pricing

business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

  1. i and ii

  2. ii and iv

  3. i, ii and iii

  4. i, ii and iv

Show answer
Correct Option: D
Explanation:

Micro economics deals with the individual approach of various parties involved in an economy, i.e, consumer, producer, price, and cost. Therefore, it studies consumer's behaviour, producer's equilibrium, and factor pricing. 

Macro-economics is also known as __________.
(i) Method of Lumping
(ii) Price Theory
(iii) General equilibrium analysis
(iv) Aggregative Economics

business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

  1. i and ii only

  2. iii and iv only

  3. i, iii and iv only

  4. ii, iii and iv only

Show answer
Correct Option: C
Explanation:

Macro economics relates to the study of economics as a whole in an economy. It reflects general equilibrium analysis of a set of people involved in the exchange mechanism i.e, as a market. Therefore, it measures the aggregates of all the micro units in the economy.

Which of the following is not correct?

business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

  1. Micro and Macro economics are complementary to each other.

  2. Every macro economic problem requires micro economic analysis for its proper understanding.

  3. Micro-economic behaviour can be added-up to drive macro economic behaviour.

  4. What is macro from the national angle is micro from world angle.

Show answer
Correct Option: C
Explanation:

Microeconomic behaviour cannot be added-up to drive macroeconomic behaviour.

The phenomenon in Microeconomics cannot be generalized for all the units in the economy on an aggregate level.

For example the theory of an individual firm cannot be universally applied to the whole industrial sector in an economy. The theory of individual consumer behaviour is different from the behaviour of the whole economy’s behaviour at the aggregate level. The demand of a single person may not always match with the economy’s aggregate demand. 

Micro economics is also known as _________.

business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

  1. price theory

  2. slicing method

  3. product theory

  4. both (a) and (b)

Show answer
Correct Option: D
Explanation:

Micro economics is also known as Price theory because it takes into account the demand and supply of individual units and thus aims to determine the price of a product using the factors of production.

It is also called the Slicing method as it is used in Microeconomics. This is because it divides the economy in slices, parts or individual units for the purpose of in-depth study. And hence the name slicing method.

"During the period of boom when aggregate demand, national income and prices are high, entrepreneurs tend to make high profits."
This statement implies _______.

business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

  1. effect of micro economic variables on macro variables

  2. effect of macro economic variables on micro variables

  3. interdependence of micro and macroeconomics

  4. both (b) and (c).

Show answer
Correct Option: D
Explanation:

When boom period is going on in the economy, the macro level economic growth is reflected positively in the micro variables of the economy, due to which all the inter-related sectors enjoy the benefits. Therefore, it showcases the relation between micro and macro economics.

Which of the following does not suggest a macroeconomic approach for India?

business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

  1. Determining the GNP of India.

  2. Finding the causes of failure of X and Co.

  3. Identifying the causes of inflation in India.

  4. Analyse the causes of failure of industry in providing large scale employment.

Show answer
Correct Option: B
Explanation:

Macro economics deals in the study of a nation's aggregate demand, aggregate supply, national income, employment, inflation etc. Therefore, it does not deal in individual variables like X and Co , it is micro approach because micro deals with individual part of the society.

Which of the following is defined as branch of economic analysis that studies the economic behaviour of the individual unit, a particular household, or a particular firm?

business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

  1. Macro economics

  2. Micro economics

  3. National economics

  4. General economics

Show answer
Correct Option: B
Explanation:
Microeconomics is defined as "The study of the economic choices individuals and firms make and of how these choices create markets." 

The study of microeconomics looks at specific markets individually and in great detail. Thus it will tend to examine micro variables such as the demand and supply decisions specific to a particular market or good. Thus its variables of concern will include how individual firms, individual workers, individual consumers, and individual investors interact and make decisions in the marketplace.

 It will not be concerned with the aggregate market demand, or any other aggregate variables that treat the whole economy as one unit. 

From the national point of view which of the following indicates micro approach?

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  1. Per capital income of India.

  2. Under employment in agricultural sector.

  3. Lock out in TELCO

  4. Total savings in India

Show answer
Correct Option: C
Explanation:

Microeconomics deals with the study of individual demand, supply, income, production, etc. so lockout in TELCO which is an individual firm in the industry is a micro concept.

Macro economics is the study of:

business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

  1. All aspects of scarcity

  2. The national economy and the global economy as a whole

  3. Big businesses

  4. The decisions of individual businesses and people

Show answer
Correct Option: B
Explanation:

Macro economics deals in the study of a nation's aggregate demand, aggregate supply, national income, employment, inflation etc. It simply focusses on the economy as a whole. Therefore, it is the study of a nation's economy as well as its relation with other countries. 

_____ is a study of one particular unit rather than all the units combined together.

business economics and quantitative methods introduction to micro economics microeconomics and macroeconomics : introduction economic ideas of j k mehta micro and macro economics

  1. Macro economics

  2. Micro economics

  3. Both (A) and (B)

  4. Social economics

Show answer
Correct Option: B
Explanation:
Microeconomics is defined as "The study of the economic choices individuals and firms make and of how these choices create markets." 

The study of microeconomics looks at specific markets individually and in great detail. Thus it will tend to examine micro variables such as the demand and supply decisions specific to a particular market or good. Thus its variables of concern will include how individual firms, individual workers, individual consumers, and individual investors interact and make decisions in the marketplace.

 It will not be concerned with the aggregate market demand, or any other aggregate variables that treat the economy as one unit.