Microeconomics Fundamentals Quiz

The main focuses of economics are the production, distribution, and consumption of goods and services, as well as the behavior and interactions of economic agents.

Microeconomics analyzes individual agents and markets, their interactions, and the outcomes of interactions in the economy.

The broad distinctions within economics include those between positive economics (describing 'what is') and normative economics (advocating 'what ought to be'), between economic theory and applied economics, and between rational and behavioral economics.

<p>Macroeconomics analyzes the economy as a system, including the interactions of production, consumption, saving, and investment, as well as factors affecting it such as employment, inflation, economic growth, and public policies.</p> Signup and view all the answers

<p>Examples of individual agents in microeconomics include households, firms, buyers, and sellers.</p> Signup and view all the answers

<p>Net income is an entity's income minus cost of goods sold, expenses, depreciation and amortization, interest, and taxes for an accounting period.</p> Signup and view all the answers

<p>Net income is computed as the residual of all revenues and gains less all expenses and losses for the period.</p> Signup and view all the answers

<p>Net income deducts all expenses and losses from revenues and gains, while gross income only deducts the cost of goods sold from revenue.</p> Signup and view all the answers

<p>For households and individuals, net income refers to the (gross) income minus taxes and other deductions (e.g. mandatory pension contributions).</p> Signup and view all the answers

<p>Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings.</p> Signup and view all the answers

<p>Revenue in accounting is the total amount of income generated by the sale of goods and services related to the primary operations of the business.</p> Signup and view all the answers

<p>The term 'revenue' may refer to income in general, or it may refer to the amount, in a monetary unit, earned during a period of time.</p> Signup and view all the answers

<p>In accounting, revenue is a subsection of the Equity section of the balance statement, since it increases equity.</p> Signup and view all the answers

<p>'Top line' refers to revenue due to its position at the very top of the income statement.</p> Signup and view all the answers

<p>'Bottom line' denotes net income, which is gross revenues minus total expenses, and is related to revenue.</p> Signup and view all the answers