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| Chapter-1 What is economics? Economics is one type of management with
limited funds. It defines the consumption, production, distribution, and
exchange of goods among various people and groups of society. What is microeconomics? It’s a study of the behavior of individuals as
consumers, resource owners, and firms. It solves three major problems, i.e.,
what, how, and for whom to produce. It’s a study about the pricing factors of
demand, supply, wages, rent interest, and profit that result in greater social
welfare. What is macroeconomics? It’s a study of the overall economic phenomena
of a country or the world. It is used to solve monetary problems.
Macroeconomics gives an overall view of income, employment, general price
level, inflation, distribution, and economic growth toward the desired goals.
It helps analyze economic fluctuations and provides remedies. Define an economy. An economy is a system in which people perform
different activities like production, distribution, consumption, investment,
income, and employment within a geographical area or political boundary. Define the production possibility curve. The production possibility curve shows various
alternative combinations of two goods that can be produced when resources are
fully and efficiently employed. |