Question

Please answer all questions

The following are examples of what can more properly be characterized as Microeconomic type of analysis, EXCEPT:The following statements correctly describe what Economics is about, EXCEPT:

Question 1 options:

	a)Is the study of how individuals make rational choices with limited economic resources.
	b)Is the study of the efficient allocation of economic resources in the society.
	c)Is the study of supply, demand and aggregate effects of individual choices. d)Is the study of how to maximize monetary wealth.
	The following are examples of what can more properly be characterized as Microeconomic type of analysis, EXCEPT: a)The analysis of how income taxes affect the demand and supply in the labor market. b)The analysis of how oil prices affect the demand for SUV's in Chicago. c)The analysis of how interest rates affect the Total demand and supply for houses in the USA. d)The analysis of how Interest Rates could affect Total economic growth. The following are true statements about the economic concept of Rational Choices, EXCEPT: a)Is the best possible choice given the conditions available. b)Must be a perfect choice. c)Is subjective. d)Is limited by the information available. The following are proper descriptions about the concept of Opportunity Cost, EXCEPT: a)Is the value of the best alternative forgone when making a choice. b)Opportunity cost is strictly related to the objective monetary cost of a choice. c) Opportunity Cost is sunk cost, therefore is irrelevant. d)Opportunity cost includes subjective valuations.

Answer 1

a) "D"

Is the study of how to maximize monetary wealth, this statement is wrong as it describes the Macro economic theory not micro economic.

b) "D"

Interest rate affecting total economic growth is not a micro economic study but belongs to the macro economic.

c) "B"

that is not a perfect choice but it is limited by the information and it is subjective.

d) "C"

Opportunity cost is not the sunk cost and it is not relevant.