Introduction to Micro and Macro Economics — Economics STD 12 Commerce / Arts — Question
Maharashtra BoardEnglish MediumSTD 12 Commerce / ArtsEconomicsIntroduction to Micro and Macro Economics4 Marks
Question
Micro economics is known as Income theory.
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Answer
No, I do not agree with this statement. OR Micro economics is also known as price theory. Yes, I agree with this statement.
Micro Economics is known as ‘Price Theory’.
The scope of micro economics includes the study of product pricing and factor pricing.
The theory of product pricing explains how the price of food grains, vegetables, clothes, etc., are determined.
They are determined by the interaction of market demand and supply forces.
The theory of factor pricing explains the distribution of factor income such as rent on land, wages to labourers, interest on capital and profit to entrepreneurs.
The factor prices are also determined by the demand and supply forces.
Therefore, Micro Economics is also known as ‘Price Theory’.
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