This is the introductory chapter of Microeconomics. In this article, I have included the most important questions of the first chapter.
- Define microeconomics.
Ans: Microeconomics is the branch of economics that studies individual units like consumers and firms. - What does the Greek word ‘Micro’ mean?
Ans: It means ‘small’. - Give an example of a microeconomic study.
Ans: Demand and supply analysis of a particular good. - What is the central problem of microeconomics?
Ans: The problem of allocation of scarce resources. - What do you mean by scarcity?
Ans: Scarcity refers to the limited availability of resources to satisfy unlimited wants. - What is meant by opportunity cost?
Ans: It is the cost of the next best alternative foregone. - What do you understand by positive economics?
Ans: It deals with ‘what is’ in economic analysis. - Define normative economics.
Ans: It deals with ‘what ought to be’ in economic analysis. - Give an example of a normative economic statement.
Ans: The government should provide free education to all. - What is meant by marginal utility?
Ans: It is the additional satisfaction derived from consuming one more unit of a good.
3-4 Marker Questions
- Why does an economic problem arise? Explain.
Ans:- Scarcity of Resources: Limited availability of resources to meet unlimited wants.
- Alternative Uses: Resources can be used for multiple purposes.
- Unlimited Wants: Human wants are never-ending.
- Need for Choice: As resources are scarce, choices must be made.
- Distinguish between microeconomics and macroeconomics.
Ans: Basis Microeconomics Macroeconomics Scope Studies individual units Studies the economy as a whole Focus Demand, supply, pricing Inflation, GDP, employment Example Demand for apples National income growth - What are the three central problems of an economy? Why do they arise?
Ans:- What to Produce? Deciding the goods and services to produce.
- How to Produce? Choosing between labor-intensive and capital-intensive methods.
- For Whom to Produce? Deciding the distribution of goods among people.
- Reason: Arises due to scarcity of resources.
- What is meant by the problem of allocation of resources?
Ans:- The scarcity of resources necessitates allocation among competing needs.
- Choice-making is essential due to alternative uses of resources.
- Efficient allocation ensures maximum welfare.
- Affects economic growth and the distribution of wealth.
- State the problems relating to the allocation of resources in an economy.
Ans:- What to produce? Selection of goods and services.
- How to produce? Deciding the production technique.
- For whom to produce? Determining target consumers.
- Efficient use of resources: Avoiding wastage and maximizing output.
- Explain the central problem of how to produce.
Ans:- Labor-intensive technique: Uses more labor, suitable for labor-rich economies.
- Capital-intensive technique: Uses more machines, suitable for developed economies.
- Cost efficiency: Firms prefer the least costly method.
- Impact on employment: Choice affects job opportunities.
Introduction to Microeconomics Class 11 Notes
As per the CBSE marking scheme, this chapter carries a weightage of 4 marks. Hence, a long answer-type question from this chapter is not expected.
If you have any questions, you can either join my telegram channel or ask about them in the comments section. I’ll try to resolve your doubts as soon as possible.