Economics Fundamentals Quiz

• The term ‘Economics’ owes its origin to the Greek word ‘Oikonomia’ which means ‘household’.
• Till 19th century, Economics was known as ‘Political Economy.’
• The book named ‘An Inquiry into the Nature and Causes of the Wealth of Nations’ (1776) usually abbreviated as ‘The Wealth of Nations’, by Adam Smith is considered as the
  first modern work of Economics.
• Business Economics may be defined as the use of economic analysis to make business decisions involving the best use of an organization’s scarce resources.
• Joel Dean defined Business Economics in terms of the use of economic analysis in the formulation of business policies. Business Economics is essentially a component of Applied Economics as it includes application of selected quantitative techniques such as linear programming, regression analysis, capital budgeting, break even analysis and cost analysis.
• Micro Economics is basically the study of the behaviour of different individuals and organizations within an economic system. In other words, Microeconomics examines how the individual units (consumers or firms) make decisions as to how to efficiently allocate their scarce resources.
• We mainly study the following in Micro-Economics: (i) Product pricing; (ii) Consumer behaviour; (iii) Factor pricing; (iv) The economic conditions of a section of people; (v) Behaviour of firms; and (vi) Location of industry.
• Macro Economics, in contrast, is the study of the overall economic phenomena or the economy as a whole, rather than its individual parts. Accordingly, in Macro-Economics, we study the behaviour of the large economic aggregates, such as, the overall levels of output and employment, total consumption, total saving and total investment, exports, imports and foreign investment and also how these aggregates shift over time.
• It analyzes the overall economic environment in which the firms, governments and households operate and make decisions.
• A few areas that come under Macro Economics are: (i) National Income and National Output; (ii) The general price level and interest rates; (iii) Balance of trade and balance of payments; (iv) External value of currency; (v) The overall level of savings and investment; and (vi) The level of employment and rate of economic growth.
• While Business Economics is basically concerned with Micro Economics, Macro economic analysis also has got an important role to play. Macroeconomics analyzes the background of economic conditions in an economy which will immensely influence the individual firm’s

Test your knowledge of economics fundamentals with this quiz. From the origins of economics to the study of micro and macroeconomics, this quiz covers key concepts and principles in the field of economics.