BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Micro economics is the study of the allocation of scarce resources
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Economists use models to make testable predictions
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Individuals, governments, and firms use micro economic models and predictions in decision making
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Micro economics is often called income theory to emphasize the important role that prices play
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Detailed explanation-1: -The determination of the cost of a product is not a part of the microeconomic study. Explanation: The study of cost/price is part of macroeconomics rather than microeconomics. Microeconomics is defined as the study of the behavior of individuals and making decisions on resource allocation.
Detailed explanation-2: -No, microeconomics is not known as the income theory, rather, it is known as the price theory, as it focuses on determining the prices of commodities and factors of production in the market.
Detailed explanation-3: -Micro economics is a field of economics that deals from an individual point of view. Therefore, unfavorable gender ratio is not a subject matter of micro economics as the economic activities of an individual is not affected due to this.
Detailed explanation-4: -The income theory of money states that changes in the aggregate demand are the resultant of changes in income, rather than supply of money. Thus, changes in the aggregate money income or nominal income, and not the supply of money, are the main determinants of aggregate demand and hence of prices.