Extra Questions on Chapter 1 - Economics Class 10

Introduction to Microeconomics

1. What is the difference between microeconomics and macroeconomics?
- Microeconomics deals with the study of individual economic units such as households, firms, and markets, while macroeconomics deals with the study of the whole economy, including national income, employment, inflation, and economic growth.

2. Explain the concept of opportunity cost.
- Opportunity cost is the cost of an alternative that must be forgone to pursue a certain action or decision. It is the value of the next best alternative that must be sacrificed in order to obtain something else.

3. Define the term ‘utility’.
- Utility refers to the satisfaction or benefit that a consumer derives from consuming a particular product or service. It is a subjective measure and varies from person to person.

4. What is the law of demand?
- The law of demand states that there is an inverse relationship between the price of a product and the quantity demanded of that product. In other words, as the price of a product increases, the quantity demanded of that product decreases, and vice versa.

5. What is the law of supply?
- The law of supply states that there is a direct relationship between the price of a product and the quantity supplied of that product. In other words, as the price of a product increases, the quantity supplied of that product also increases, and vice versa.

6. What is elasticity of demand?
- Elasticity of demand is a measure of the responsiveness of the quantity demanded of a product to a change in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.

7. What is elasticity of supply?
- Elasticity of supply is a measure of the responsiveness of the quantity supplied of a product to a change in its price. It is calculated as the percentage change in quantity supplied divided by the percentage change in price.

8. What is market equilibrium?
- Market equilibrium is a situation in which the quantity demanded of a product equals the quantity supplied of that product, at a particular price. At this price, there is no excess demand or excess supply in the market.

9. What are the factors that affect demand?
- The factors that affect demand include price, income, tastes and preferences, price of related goods, and availability of substitutes.

10. What are the factors that affect supply?
- The factors that affect supply include price, cost of production, technology, government policies, and availability of inputs.

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