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QNS.1 Define micro economics. What is its place in economic
Theory ? How it is different from macro economics?
ANS:- The study of the operations of the components of a
national economy, such
as individual firms, households and consumers.
Microeconomics is a branch of economics that studies how
individuals, households
and firms and some states make decisions to allocate limited
resourcestypically inmarkets where goods or services are being
bought and sold. Microeconomics examineshow these decisions and
behaviors affect the supply and demand for goods andservices, which
determines prices; and how prices, in turn determine the supply
anddemand of goods and services.
Macroeconomics is the branch of economics that deals with
aggregateeconomic decision or behavior of an economy as a whole for
example the problem of
inflation. level of un employment balance of payment deficity
simply it studies theeconomy as a whole while Microeconomics is the
branch of economics that studiesthe behavior of an individual
decision making unit such as individual firms decision inthe
market, how an individual uses it's income to maximize
satisfaction, how the price ofeach commodity in the market is
affected by the forces of demand and supply.
QNS.2Define elasticity of demand. Distinguish between
price elasticity, income elasticity and cross elasticity
ofdemand. Discuss the factors that determine the elasticityof
demand.ANS:-Responsiveness of the demand for a good or service to
the increase ordecrease in its price. Normally, sales increase with
drop in prices and decrease with risein prices. As a general rule,
appliances, cars, confectionary and other non-essentialsshow
elasticity of demand whereas most necessities show inelasticity of
demand
Cross price elasticity of demand measures how much demand of one
good, say xchanges when the price of another good, say y changes,
holding everything elseconstant.For example, you can measure what
happens to the demand of bread when the price ofmilk changes.
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by very large firms but also by small firms in a localised
context. This is caused byimperfections in the market, mainly due
to a lack of knowledge of prices, availability andso on.
It is always tempting when looking at market structure to
investigate the likes of
Microsoft or the supermarkets but interesting cases can be found
all around in relation
to how firms behave and the complexities of analysing market
structures.
We tend to assume that monopolies, for example, are large firms
who dominate national
and international markets - this can be the case but is not
always so.
Qns.5 What do you mean by Social Accounting?Discuss
its techniques briefly.
ANS:- Social accounting (also known as Social and
EnvironmentalAccounting, Corporate Social Reporting, Corporate
Social ResponsibilityReporting, Non-Financial Reporting,
Sustainability Accounting) is the process ofcommunicating the
social and environmental effects of organisations' economic
actionsto particular interest groups within society and to society
at largeSocial accounting iscommonly used in the context of
business, or corporate social responsibility (CSR),although any
organisation, including NGOs, charity and government agencies
may
engage in social accounting.
Social accounting is a process that seeks to measure the
progress and performance of
organisations against their social, environmental and economic
objectives.
In Cambridgeshire a range of both 3rd sector and statutory
organisations are starting to
look at ways on which this can be taken forward to improve the
way in which outcomes
are identified, measured and reported. Particularly helpful for
3rd Sector organisations,
whose work often includes many soft hard to measure
outcomes.
Recently The Social Enterprise People have secured Investing in
Communities funding
to apply Social Accounting techniques to local projects. The
findings of these studies
can be found on their web site.
