Introduction of Microeconomics Test 26

The Consumer Price Index (CPI) is a measure that examines the weighted average of prices of a basket of consumer goods and services, which includes transportation, food, and medical care. It is calculated by taking price changes for each item in the predetermined basket of goods and averaging them.

Microeconomics deals with the study of economics from the viewpoint of an individual unit. Factor pricing refers to the prices of various factors (like land, labor, capital and entrepreneurship) of production, which is decided on the basis of market forces, i.e. demand, supply, and income which are micro variables.

The Reserve Bank of India has made the upper limit of annual household income for microfinance borrowers in rural areas Rs 1.25 lakh to improve credit availability in rural and semi-urban areas.

In microeconomics, the equilibrium price is the price at which the quantity demanded by consumers is equal to the quantity supplied by producers, resulting in a market balance.

A perfectly competitive market in microeconomics is characterized by a large number of buyers and sellers, none of whom have significant market power. Each firm is a price taker, meaning they cannot influence market prices and have a small market share.

Microeconomics deals with the study of individual economic units such as households, firms, and industries.

Microeconomic issues involve the analysis of individual economic agents' behavior, such as consumers and firms.

Macroeconomic issues include the determination of national income and employment levels, which are aggregates of individual economic activities.

‘Micros’, which means ‘Small’ belongs to Greek word.

A microeconomic externality occurs when individual actions have spillover effects on others in a local context. In this case, the neighbor's loud music is affecting another neighbor's sleep.