Class 12 Microeconomics Sandeep Garg Solutions Chapter 1 – Introduction to Microeconomics
FAQs on Chapter 1 Solutions for Class 12 Microeconomics by Sandeep Garg
1. What is the difference between microeconomics and macroeconomics?
The difference between microeconomics and macroeconomics is as follows:
1. Microeconomics is that part of economics where we study the economic problems related to an individual unit like a group or company level. Whereas macroeconomics is that part of economics where we study the economic problems of the aggregate level of the economy.
2. The main aim of microeconomics is to determine the commodity price or factors of production for an individual firm but macroeconomics focuses on national income, employment, and growth of the nation in the economy as a whole.
3. The main tools are demand and supply for microeconomics and for Macroeconomics it is aggregate demand and aggregate supply.
4. Microeconomics is based on the theory of price and consumer behavior whereas macroeconomics is based on the theory of multi-price and gap in the economy.
2. What do you understand by the term positive economic analysis?
Positive economic analysis is the objective analysis where we study the use of various positive statements and mechanisms in ascertaining the economic problem and how to solve it. Most economists use past data or what has happened already to assumptions about the future in a given economy. These are some factual statements that describe what was, what is and what would be. These investigative statements are positive economics. It is a contrasting perspective as compared to normative economics.
3. Discuss the subject matter of Economics.
Traditionally, the subject matter of economics has been studied under two branches:
1. Microeconomics - This is the branch of economics, which studies the problems of each economic unit. Its main tools are demand and supply e.g. Individual income, individual expenses.
2. Macroeconomics – This is the branch of economics that studies economic problems at the level of the economy as a whole. It deals with the integration of integrated products and the common price level across the economy. Its main tools are integrated search and integrated delivery.
4. What was Alfred Marshall's meaning of the term ‘Economics’?
Economics is the study of human activities in the ordinary course of business. It learns how a person earns his living and how he spends it. In this way, learning wealth, on the other hand, is part of the study of humans, which is very important. He gave ‘Man’ the first place and ‘Wealth’ as the second thing and made it clear that wealth belongs to man and man is not for wealth. Wealth is not the ‘end’, it is the only ‘way’ to prosperity.
You can avail all the well-researched and good quality chapters, sample papers, syllabus on various topics from the website of Vedantu and its mobile application available on the play store.
5. Distinguish between a middle-class economy and a market economy.
1. Centrally Planned Economy
In a planned economy, all major economic decisions are made by the government.
The government owns the means of production and distribution.
Prices are set by the government
An example of a centralized economy would be North Korea.
2. Market economy
In a market economy, various economic decisions are left to the free market or supply and demand rules.
Private ownership of production and distribution methods
Prices are determined by the demand associated with the supply of products.
An example of a market economy would be South Korea.
