Introduction to Microeconomics Test 4

Study of macroeconomics involves the study of the economy as a whole considering all large factors whereas Microeconomics is a study of an individual economic unit. It is a narrower concept including only individual factors of any firm, company.

Microeconomics studies individual factors. While doing any study regarding the microeconomics only small factors are taken into consideration since the study of larger factors and the total economy is part of the study of macroeconomics.

Ragnar Frisch used the terms micro & macroeconomics for the first time in 1933. He is known as one of the founders of the discipline of econometrics. 

Micro economic analysis considers factors affecting only on an individual basis. It is a narrow concept. Factors affecting the society as a whole, eg: unemployment and inflation are influenced using government policies and are a part of macro economic study. Micro economic analysis, thus, generally, ignores the intervention policy of the Government.

The term complementary means the things which run simultaneously, meaning thereby that without one the other can not be worked out.
Microeconomics and macroeconomics are just like the two sides of a coin whereas microeconomics has its foundation on macroeconomics and vice versa.

Any point beyond the PPF that is not attainable is called the unattainable combination. With the given amount of available resources, it is impossible for the economy to produce any combination more than the given possible combinations i.e. an economy can never operate at any point outside the PPF.  Thus this situation arises either due to lack of resources or technological constraints.

The production possibility frontier refers to the graphical representation of possible combinations of two goods that can be produced with given resources and technology. 

What to produce is an alternative problem of allocation of resources. It talks about the things that should be produced with the limited resources that are available in the economy. Thus it is important that you allocate these resources to various uses in an efficient manner. So that the maximum output can be achieved.

Positive statements study the facts of life i.e it deals with 'things as they are'. It deals with what are the economic problems and how are they actually solved. It explains the cause and effect relationship and avoids giving suggestions.

Both the statements A, C, and D are giving suggestions but B is stating a fact and it not suggesting anything. Thus option B is a positive statement.