Economics 12th: Chap. 1 Introduction to Micro and Macro Economics


Maharashtra Board

Economics Class 12th New Syllabus Year 20-21

Chap 1: Introduction to Micro Economics


Q.1. Choose the Correct option:


1. The Branch of Economics that deals with
the allocation of resources.
  1. Micro Economics
  2. Macro Economics
  3. Econometrics
  4. None of these
Answer:

Option : only a


2. Concepts studied under Micro Economics.
  1. National Income
  2. General price level
  3. Factor pricing
  4. Product pricing
Answer:

Option : c and d


3. Method adopted in micro economics analysis.
  1. Lumping method
  2. Aggregative method
  3. Slicing method
  4. Inclusive method
Answer:

Option : only c


4. Concepts studied under Macro Economics.
  1. Whole economy
  2. Economic development
  3. Aggregate supply
  4. Product pricing
Answer:

Option : a, b, c


Q.2.Complete the Correlation:


1) Micro economics : Slicing method : : Macro economics : Lumping method

2) Micro economics : Tree : : Macro economics : Forest

3) Macro economic theory : Income and employment : : Micro economics :

Theory of Product Pricing

Q.3.Identify and explain the concepts from the given illustration:


1) Gauri collected the information about the income of a particular firm.

Answer

Concept: Study of Individual Units (Micro Economics)

Explanation:
Micro economics is the study of the behaviour of small individual economic units, like individual firm, individual price, individual household, etc.


2) Ramesh decided to take all decisions related to production, such as what and how to produce?

Answer

Concept: Free market economy(Micro Economics)

Explanation:

 1. A free market economy is that economy where the economic decisions regarding production of goods such as

a) What to produce?
b) How much to produce?
c) How to produce?, etc.
are taken at individual level.

2. There is no government intervention or any other agency


3) Shabana paid wages to workers in her factory and interest on her bank loan.

Answer

Concept: Macro Theory of Distribution(Macro Economics)

Explanation:
Macro theory of distribution deals with the relative shares of rent, wages, interest and profit in the total national income.

Q.4. State with reasons whether you agree or disagree with the following statements:

1) The scope of micro economics is unlimited.

Answer

I disagree with the above statement.

Reason

1. The scope of micro economics is limited.
2. The scope of micro economics are

a) Theory of Product Pricing : this theory helps to determine the market forces of demand and supply analysis.

b) Theory of factor Pricing: this theory deals to determine the factor rewards for rent on land, wages to labour, interest on capital and profit to entrepreneur.

c) Theory of Economic Welfare: this theory deals with efficiency in allocation of resources so maximum number of people is satisfied.


2) Macro economics deals with the study of individual behaviour.

Answer

I disagree with the above statement.

Reason

1. Micro economics deals with the study of individual behaviour.

 2. Micro economics is the study of the behaviour of small individual economic units, like individual firm, individual price, individual household, etc


OR

Reason

1. Macro economics deals with the study of Study of Aggregate.

2. Macro economics deals with the study of economy as a whole. It is concerned with the aggregate concepts such as national income, national output, national employment, general price level, business cycles etc.


3) Macro economics is different from micro economics.

Answer

I Agree with the above statement.

Reason

1. Micro economics studies the behaviour of individual unit of an economy.

2. Macro economics studies the behaviour of aggregates of the economy as a whole.

3. Hence, Macro economics is different from micro economics.


4) Micro economics uses slicing method.

Answer

I Agree with the above statement.

Reason

1. Micro economics uses slicing method so that it can divide the whole economy into small individual units and then study each unit in detail.

2. For example: Study of individual income, individual demand, etc.

3. Hence, Micro economics uses slicing method.


5) Micro economics is known as Income theory.

Answer

I disagree with the above statement.

Reason

1. Micro economics is known as price theory.
2. Because, Micro economic deals with determination of the prices of goods and services as well as factors of production.


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