Microeconomics Fundamentals Quiz

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Questions and Answers

What does microeconomics analyze?

Factors affecting employment of the resources of labour, capital, and land
Individual agents and markets, their interactions, and the outcomes of interactions (correct)
Currency inflation, economic growth, and public policies
The economy as a system where production, consumption, saving, and investment interact

What does macroeconomics analyze?

Currency inflation, economic growth, and public policies
Factors affecting employment of the resources of labour, capital, and land
Individual agents and markets, their interactions, and the outcomes of interactions
The economy as a system where production, consumption, saving, and investment interact (correct)

What is the distinction between positive economics and normative economics?

Both positive and normative economics advocate 'what ought to be'
Both positive and normative economics describe 'what is'
Positive economics describes 'what is', and normative economics advocates 'what ought to be' (correct)
Positive economics advocates 'what ought to be', and normative economics describes 'what is'

What are the broad distinctions within economics?

<p>Between positive economics, describing 'what is', and normative economics, advocating 'what ought to be' (A)</p>

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What does behavioral economics focus on?

<p>The effects of psychological, cognitive, emotional, cultural, and social factors on the economic decisions of individuals and institutions (A)</p>

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Flashcards

Microeconomics

Analyzes individual agents and markets, their interactions, and the outcomes of these interactions.

Macroeconomics

Analyzes the economy as a system where production, consumption, saving, and investment all interact.

Positive Economics

Describes 'what is' in economics, focusing on facts and cause-and-effect relationships.

Normative Economics

Advocates 'what ought to be', involving value judgments and opinions on economic policies and goals.

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Behavioral Economics

Studies the impact of psychological, cognitive, emotional, cultural, and social factors on economic decisions.

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Study Notes

What does microeconomics analyze? What does macroeconomics analyze? What is the distinction between positive economics and normative economics? What are the broad distinctions within economics? What does behavioral economics focus on?