Distinguish between microeconomics and macroeconomics.
Point of Difference | Microeconomics | Macroeconomics |
---|---|---|
Study Matters | It studies about individual economic units like households, firms, consumers, etc. | It studies about an economy as a whole. |
Deals with | It deals with how consumers or producers make their decisions depending on their given budget and other variables. | It deals with how different economic sectors such as households, industries, government and foreign sectors make their decisions. |
Method | The major microeconomic variables are price, individual consumer’s demand, wages, rent, profit, revenues, etc. | The major macroeconomic variables are aggregate price, aggregate demand, aggregate supply, inflation, unemployment, etc. |
Variables | The major microeconomic variables are price, individual consumer’s demand, wages, rent, profit, revenues, etc. | The major macroeconomic variables are aggregate price, aggregate demand, aggregate supply, inflation, unemployment, etc. |
Theories |
Various theories studied are:
|
Various theories studied are:
|
Distinguish between a centrally planned economy and a market economy.
What do you mean by the production possibilities of an economy?
What is a production possibility frontier?
Discuss the central problems of an economy.
Discuss the subject matter of economics.
What do you understand by normative economic analysis?
What do you understand by positive economic analysis?
Explain the concept of a production function
What would be the shape of the demand curve so that the total revenue curve is?
(a) A positively sloped straight line passing through the origin?
(b) A horizontal line?
Explain market equilibrium.
What are the characteristics of a perfectly competitive market?
What do you mean by the budget set of a consumer?
What is the total product of input?
From the schedule provided below calculate the total revenue, demand curve and the price elasticity of demand:
Quantity |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
Marginal Revenue |
10 |
6 |
2 |
2 |
2 |
0 |
0 |
0 |
- |
When do we say that there is an excess demand for a commodity in the market?
How are the total revenue of a firm, market price, and the quantity sold by the firm related to each other?
What is budget line?
Explain through a diagram the effect of a rightward shift of both the demand and supply curves on equilibrium price and quantity.
The following table gives the total product schedule of labour. Find the corresponding average product and marginal product schedules of labour.
Comment on the shape of MR curve in case when TR curve is a
(a) Positively sloped straight line
(b) Horizontal straight line
Explain the concepts of the short run and the long run.
How are the equilibrium price and quantity affected when?
(a) Both demand and supply curves shift in the same direction?
(b) Demand and supply curves shift in opposite directions?
What do you mean by complements? Give examples of two goods which are complements of each other.
How do the equilibrium price and the quantity of a commodity change when the price of input used in its production changes?
Suppose your friend is indifferent to the bundles (5, 6) and (6, 6). Are the preferences of your friend monotonic?
How is the wage rate determined in a perfectly competitive labor market?
Will a profit-maximising firm in a competitive market produce a positive level of output in the short run if the market price is less than the minimum of AVC? Give an explanation.