1. What is the difference between micro economics and macro economics?

          Micro economics deals with a small part or a small component of the national economy of a country. Micro economics may be defined as the branch of economic behaviour of the individual unit may be a person a particular household or a particular firm it is a study of one particular unit rather than all the units combined together.

               Macro economics may be defined as that branch of economic analysis which studies the behaviour of not one particular unit ; but of all the units combined together. It is a study of aggregates. Hence it is called Aggregate Economics. It is the study of the economic system as a whole. It is the study of the over all conditions of an economy.say , total production total consumption , total saving and total investment. Macro economics deal with the great averages and aggregates of the system rather than with particular units in it .

2. What are the important feature of a capitalist economy?

            Capitalist economy can be defined as an economy in which most of the economic activities have the following characteristics  a) There is private ownership of means of production   b) production takes place for selling the output in the market    c) There is sale and purchase of labour services at a price which is called the wage rate.

3. Write a short note on external sector.

            The external sector is the fourth important sector. Trade with the external sector can be of two kinds.

             1. The domestic country may sell goods to the rest of the world. These are called exports.

             2. The economy may also buy goods from the rest of the world. These are called imports. Besides exports and imports , the rest of the world affects the domestic economy in other ways as well.

             3. Capital from foreign countries may flow into the domestic country or the domestic country may be exporting capital to foreign countries.

4. Define Unemployment.

            Unemployment rate may be defined as the number of people who are not working and are looking for jobs divided by the total number of people who are working or looking for jobs.

5. " Economics is a science of scarcity " . Discuss.

             The quotation above represent Robbins definition of Economics. According to him " Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses".

6. Define Profit.

         Profit is payment for the services which are provided by entrepreneurship. Profits are often used by the producers in the  next period to buy new machinery or to build new factories, so that production can be expanded.

7. Economics is concerned with doing the best with what we have. Discuss.

           If our wants are virtually unlimited and our resources are scarce, we cannot conceivably satisfy all our wants. Economics is without doubt a science of efficiency that is efficiency is the use of scarce resources.

8. Define Firm.

            Economic units which carry out production of goods and services and employ factors of production. In a firm the entrepreneur is at the helm of affairs.

9. Distinguish between export and import.

            The domestic country may sell goods to the rest of the world. These are called exports. The economy may also buy goods from the rest of the world. These are called imports.

10.Define Inflation.

          Inflation is an increase in the overall price level.