{CH. 1} Introduction To Economics

Question 1

State John Maynard Keynes definition of economics

Answer 1

According to John Maynard Keynes “Economics is a study of administration of scarce means and determination of employment and income.”

Question 2

Economic activities are classified into 4 parts. Discuss each of them with an example.

Answer 2

(a)Production: An example of production can be that of the process of biscuits. By using flour, sugar, and flour.

(b) Consumption: An example of consumption could be eating of particular dish or food to satisfy hunger.

(c) Distribution: Distribution refers to sharing of produced wealth among individuals or factors of production.

(d) Exchange: Exchange could be that of a product or commodity being sold for money. For example; a pair of shoes being sold for ₹500 or a pair of trousers being sold for ₹300.

Question 3

What is microeconomics, give an example.

Answer 3

Microeconomics is the study of individuals economic units.
For eg: Household income.

Question 4

What is macroeconomics. Give an example.

Answer 4

Macroeconomics is the study of economy as a whole and its aggregates. For eg: National income.