Q. 3. Identify and explain the concepts from the
given illustrations :
1) Gauri collected the information about the
income of a particular firm.
2) Ramesh decided to take all decisions related to
production, such as what and how to produce?
3) Shabana paid wages to workers in her factory
and interest on her bank loan.
Answers
Answer:
1) Concept : Micro economics / Slicing method. Explanation : Micro economics refers to the study of small unit from whole economy. Micro economics uses slicing method to split the whole economy into small individual units. Gauri has used slicing method from micro economics to collect information about the income of a particular firm from various firms.
2) Concept: Free market Economic
Explanation:
A free market economic where the economic decisions regarding the function of goods, such as 'What to produce?, How much to produce?, How to produce? ect.,' are taken at individual levels. There is no intervention by the Government or any other agency.
3) Concept: Theory of factor pricing
explanation:
In macroeconomics land, labour, capital, entrepreneur are the factors that contribute to the production process, micro economics helps in determining the factors rewards for land, labour, capital and entrepreneur in the form of rent, wages, interest, and profit respectively.