INTRODUCTION
Q) What are the basic economic activities of life?
Answer: Production, exchange and consumption of goods and services
Q) What gives rise to the problem of choice?
Answer: Scarcity of resources
Q) What are the competing usages of the scarce resources of an economy?
Answer: Every society has to decide on how to use its scarce resources.
Q) What are the two basic economic problems faced by the society?
Answer: Allocation of resources and distribution of goods and services
Q) What is the opportunity cost of an additional unit of the goods?
Answer: The amount of the other good that has to be forgone.
Q) What are the two ways to solve the basic problems of the economy?
Answer: Free interaction of individuals or planned manner by the government
Q) What is a market?
Answer: An institution which organises the free interaction of individuals pursuing their respective economic activities.
Q) What is the difference between a market in economics and a marketplace?
Answer: A market in economics is not a physical location, it is a set of arrangements where economic agents can interact.
Q) What are the forces which bring coordination in a market system?
Answer: Prices of goods and services
Q) What is the difference between positive and normative economics?
Answer: Positive economics studies how mechanisms function, normative economics evaluates them.
Q) What are the two broad branches of economics?
Answer: Microeconomics and Macroeconomics
Q) What is the focus of microeconomics?
Answer: Behaviour of individual economic agents in the markets for different goods and services.
Q) What is the focus of macroeconomics?
Answer: Behaviour of aggregate measures such as total output, employment and aggregate price level.
Q) What are some of the important questions that are studied in macroeconomics?
Answer: Level of total output, how it is determined, how it grows, reasons behind unemployment, why prices rise.
Q) What is the main focus of this book?
Answer: The basic ideas in microeconomics
