Introduction of Microeconomics Test 27

Macroeconomics primarily examines aggregate economic variables such as national income, unemployment rates, and inflation.

Ragnar Frisch is a Norwegian economist who created the terms 'microeconomics' and 'macroeconomics" for the first time in the year 1993.

Microeconomics deals with individual firms and consumers, making the analysis of a specific company's pricing strategies a microeconomic issue.

Socialists aim to achieve greater equality in decision-making and economic affairs, which means social welfare and equal rights of all must be achieved.

Microeconomics is primarily concerned with studying the economic decisions made by individual consumers and firms, as well as their interactions in various markets.

In microeconomics, the government's role includes providing public goods, enforcing property rights, and regulating markets to promote economic stability and fairness.

Option (B) is an example of normative economics because it expresses a value judgment about the potential benefits of increasing taxes on cigarettes.

The central problem of an economy encompasses the allocation of scarce resources, the optimization of resource utilization, and the pursuit of economic development. It revolves around determining what to produce, how to produce, and for whom to produce. These questions guide economic decision-making and resource allocation to ensure efficiency and growth while addressing the unlimited wants and needs of society. Therefore, the central problem involves balancing resource scarcity with societal demands to achieve optimal outcomes and sustained development.

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 can't influence market prices and have a small market share.

Normative economics focuses on making value judgments and recommendations about what "ought to be,".