Unit 7

Question 1

Define economic welfare.

Answer 1

Economic welfare is the level of well-being or prosperity or living standards of an individual or group of individuals such as a country.

Question 2

Define Microeconomics.

Answer 2

Microeconomics is the study of the behaviour of individuals or groups such as consumers, firms or workers, typically within a market context.

Question 3

Define Macroeconomics.

Answer 3

Macroeconomics is the study of the economy as a whole, including inflation growth and unemployment.

Question 4

What is Neo-classical theory?

Answer 4

Neo-classical theory is a theory of economics which typically starts with the assumption that economic agents will maximise their benefits and act rationally, and which develops how resources will be allocated in markets and at what price through the forces of demand and supply; the margin is a key concept in neo-classical theory.

Question 5

Define utility.

Answer 5

Utility is the satisfaction or benefit derived from consuming a good or a set of goods.