Microeconomics is concerned with
Microeconomics is concerned with
- A) the aggregate or total levels of income, employment and output
- B) a detailed examination of specific economic units that make up the economic system
- C) positive economics, but not normative economics
- D) the establishing of an overall view of the operation of the economic system
Correct Answer: B) a detailed examination of specific economic units that make up the economic system
Explanation
Microeconomics is a branch of economics that deals with the behavior of individual economic units such as consumers, firms, and industries. This branch of economics is concerned with how these units make decisions and interact with each other in markets. The question is asking what microeconomics is concerned with.
Option A suggests that microeconomics is concerned with the total levels of income, employment, and output. However, this is incorrect as these are macroeconomic concepts.
Option B is the correct answer. It states that microeconomics is concerned with a detailed examination of specific economic units that make up the economic system. This means that microeconomics focuses on how individual units make decisions about what to produce, how much to produce, and at what price to sell their goods and services.
Option C suggests that microeconomics is only concerned with positive economics, which is not entirely accurate. While microeconomics does rely heavily on positive economics (which is the study of what is, rather than what ought to be), it also incorporates normative economics (which is the study of what ought to be).
Option D suggests that microeconomics is concerned with establishing an overall view of the operation of the economic system. This is incorrect as microeconomics only deals with specific economic units and how they interact with each other in markets.
In summary, microeconomics is concerned with how individual economic units make decisions and interact with each other in markets.