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Questions and Answers
Microeconomics focuses on the behavior and interactions of economic agents within the economy.
True
Macroeconomics analyzes the economy at the individual agent and market level.
False
Positive economics describes 'what ought to be' while normative economics describes 'what is'.
False
Economic theory and applied economics are two broad distinctions within the field of economics.
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Rational and behavioral economics are two distinct branches within economics.
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Study Notes
Definition of Economics
- Economics is a social science that studies the production, distribution, and consumption of goods and services.
Scope of Economics
- Economics focuses on the behavior and interactions of economic agents and how economies work.
Microeconomics
- Microeconomics analyzes the basic elements in the economy.
- It examines individual agents, including households, firms, buyers, and sellers.
- It studies the interactions between these agents and the outcomes of these interactions.
Macroeconomics
- Macroeconomics analyzes the economy as a system.
- It examines the interactions between production, consumption, saving, and investment.
- It considers factors affecting the economy, including:
- Employment of resources (labour, capital, and land)
- Currency inflation
- Economic growth
- Public policies and their impact on the economy
Distinctions within Economics
- Positive economics: describes "what is"
- Normative economics: advocates "what ought to be"
- Economic theory: theoretical foundations of economics
- Applied economics: practical application of economic theories
- Rational economics: assumes that economic agents make rational decisions
- Behavioral economics: considers the psychological and social factors that influence economic decisions
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Description
Test your knowledge of Microeconomics with this quiz! Challenge yourself with questions about individual agents, markets, and the outcomes of economic interactions. See how well you understand the basic elements of the economy and the behavior of economic agents.
