Economics: Micro, Macro, Utility, Market, and Index
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Questions and Answers

Which branch of economics focuses on the allocation of resources?

  • Econometrics
  • Macroeconomics
  • Monetary Economics
  • Microeconomics (correct)

Which method is commonly used in microeconomic analysis?

  • Inclusive method
  • Aggregative method
  • Lumping method
  • Slicing method (correct)

Match the economist with their contribution:

Adam Smith = Father of Economics Alfred Marshall = Principles of Economics Macroeconomics = General equilibrium Microeconomics = Lumping method

Which of the subsequent factors falls within the scope of macroeconomics?

<p>Employment level (C)</p> Signup and view all the answers

What type of utility does a blood bank primarily exemplify?

<p>Time utility (B)</p> Signup and view all the answers

Which type of demand applies to two or more goods used together to satisfy a single want?

<p>Joint/Complementary demand (C)</p> Signup and view all the answers

What is the relationship between the demand for inferior goods and income?

<p>Inverse (D)</p> Signup and view all the answers

Which market type is characterized by a homogeneous product?

<p>Perfect competition (A)</p> Signup and view all the answers

Classification of markets is done on the basis of what aspect?

<p>Place (A)</p> Signup and view all the answers

Choose the wrongly matched pair:

<p>Perfect competition = Many buyers Monopoly competition = Many sellers Monopolistic competition = Differentiated product Oligopoly = Uncertainty</p> Signup and view all the answers

Under perfect competition, what are sellers considered to be?

<p>Price takers (C)</p> Signup and view all the answers

Which statement is incorrect regarding index numbers?

<p>Index number is a geographical tool (A)</p> Signup and view all the answers

Index numbers are useful for?

<p>All of the above (D)</p> Signup and view all the answers

What describes statements that apply weighted index numbers?

<p>Assigns suitable 'weights' to various commodities (B)</p> Signup and view all the answers

While estimating national income, we include only value of final goods and services in order to?

<p>Avoid double counting (D)</p> Signup and view all the answers

NDP is obtained by:

<p>Deducting depreciation from GDP (C)</p> Signup and view all the answers

Which economist viewed public finance as one of those subjects which are on the borderline between economics and politics?

<p>Prof. Hugh Dalton (A)</p> Signup and view all the answers

Which of the following are non-tax sources of revenue?

<p>Fees (A)</p> Signup and view all the answers

Match:

<p>Direct tax = Personal income tax Indirect tax = GST Fees and fines = Non-tax revenue Surplus budget = Inflation</p> Signup and view all the answers

Quantitative credit control include?

<p>Bank rate (A)</p> Signup and view all the answers

Factors which are working in unorganised money market?

<p>Money lenders (C)</p> Signup and view all the answers

Role of foreign trade:

<p>To earn foreign exchange (C)</p> Signup and view all the answers

Microeconomics: Tree :: Macroeconomics: ______

<p>Forest</p> Signup and view all the answers

Output method : Product method :: ______: Factor cost

<p>Income</p> Signup and view all the answers

Flashcards

Microeconomics

Economics branch dealing with resource allocation.

Macroeconomics

Branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole.

Slicing method

Method of economic analysis that slices a market into smaller pieces.

Scope of Microeconomics

Consumption, investment, individual demand and employment levels.

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Joint/Complementary demand

Goods jointly demanded to satisfy a single want.

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Classification of markets

Markets classified based on geographic area.

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Perfect competition

Market with homogeneous products.

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Weighted index numbers

Index numbers that adjust for the relative importance of components.

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Estimating national income

Includes only the value of final goods and services to avoid double counting.

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NDP

Net Domestic Product: Found by deducting depreciation from the GDP.

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Hugh Dalton

Economist emphasizing the borderline between economics and government.

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Non-tax sources of revenue

Source of revenue that is not from taxes.

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Bank rate

Tool for quantitative credit control.

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Unorganised money market

Includes money lenders, not formal banking systems.

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Role of foreign trade

Earning foreign exchange to encourage investment and division of labour.

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Market Demand

Demand that can come from many consumers.

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Time utility.

Utility gained from the time the product is available.

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Inverse relationship

Demand and price are inversely related

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Supply Analaysis

Revenue Concepts, including, Total Cost, Marginal Revenue.

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Market Structure

Market Structure on the basis of Competition.

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Simple Index Number

Simple Types of Index Number.

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External Debt

External debt not directly related to the bank itself.

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Study Notes

Chapter 1: Introduction to Microeconomics and Macroeconomics

  • Microeconomics deals with the allocation of resources
  • Slicing method is adopted in microeconomic analysis
  • The wrongly matched pair is Microeconomics - Lumping method
  • Scope of macroeconomics includes Consumption function, Investment function, and Employment level

Chapter 2: Utility Analysis

  • Blood bank is an example of Service utility
  • Two or more goods demanded jointly to satisfy a single want represent Joint/Complementary demand
  • The relationship between demand for inferior goods and income is inverse

Chapter 5: Forms of Market

  • Homogeneous product is the feature of Perfect competition
  • Classification of markets is done on the basis of place: Local market, National market, International market

Chapter 6: Index Numbers

  • Statements that are incorrect in relation to index numbers: Index number is a geographical tool and Index numbers measure changes in the air pressure
  • Index numbers are useful for making future predictions, help in measurement of inflation, help to frame suitable policies, and can be misused
  • Statements that apply weighted index numbers: assign suitable 'weights' to various commodities, and in most cases, quantities are used as weights

Chapter 7: National Income

  • While estimating national income, we include only value of final goods and services in order to avoid double counting
  • NDP is obtained by deducting depreciation from GNP
  • Prof. Hugh Dalton believes that "Public finance is one of those subjects which are on the borderline between economics and politics"
  • Non-tax sources of revenue include Fees

Chapter 9: Money Market and Capital Market in India

  • Bank rate is a method of quantitative credit control
  • Money lenders and Chit funds are factors which are working in unorganised money market

Chapter 10: Foreign Trade of India

  • Role of foreign trade includes earning foreign exchange and encouraging investment

Complete the correlation

  • Macroeconomics: Forest.
  • Microeconomics: Tree.
  • Makros: Microeconomics.
  • Form utility: Study book.
  • MU > Price: Less
  • Value in use > Value in exchange : Diamond

Demand and Supply Analysis

  • Downward sloping curve corresponds to Upward sloping
  • Increase in supply corresponds to constant other factors

Forms of Market

  • Monopoly corresponds to Single seller
  • Perfect Competition corresponds to Free entry and exit
  • Discriminated price for Single price.
  • Indian Railways for Natural monopoly
  • Perfect competition is described by a Large number of sellers

Index Numbers

  • Agricultural production corresponds to Inflation.
  • Current year prices and Paasche's Index for Base year prices.

National Income

  • Factor cost method for Product method and Income method

Assertion and Reasoning

  • Microeconomics has comparatively narrower scope; microeconomics studies economic behaviour of only individual economic units of economy
  • The assertion that macroeconomics is known as Income analysis is false
  • Total Utility (TU) increases at diminishing rate, but Marginal Utility (MU) goes on diminishing
  • Cross elasticity for A change in quantity demanded of one commodity due to a change in the price of the other commodity
  • Supply is a relative term and always expressed in relation to price, time and quantity
  • Regional stock exchanges have witnessed a sharp decline in the volume of trade, as Investors prefer to trade in securities listed in prominent exchanges
  • Both governments sell bonds internally, and bonds are an important type of internal debt

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Description

Brief review of microeconomics, macroeconomics, utility analysis, market forms, and index numbers. Key topics include resource allocation, demand types, market competition, and the purpose of index numbers.

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