Which of the following is not studied in micro economics?
Options
AFactor pricing
BLocation of Industry
CConsumer Behaviour
DExternal value of currency
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Introduction to Business EconomicsMTP Dec 22Question 606 of 209
All Questions Correct Answer
✅ Option d — External value of currency
All Options:
- AFactor pricing
- BLocation of Industry
- CConsumer Behaviour
- DExternal value of currency
Detailed Solution & Explanation
• Microeconomics focuses on the economic behavior of individual units, such as households, firms, and specific markets. It deals with how these individual units make decisions and interact.
• Let's analyze the options:
• Factor pricing (A) involves determining the prices of factors of production like land, labor, capital, and entrepreneurship. This is a core concept in microeconomics, as it relates to individual markets for these factors.
• Location of Industry (B) often involves decisions made by individual firms about where to set up production, considering factors like costs, access to resources, and markets. While it can have broader implications, the decision-making process at the firm level falls under microeconomics.
• Consumer Behaviour (C) is a fundamental aspect of microeconomics, studying how individual consumers make choices about what to buy, given their income and prices. This directly relates to demand theory.
• External value of currency (D) refers to the exchange rate of a country's currency against other currencies. This is a macroeconomic concept because it deals with the economy as a whole, affecting international trade, balance of payments, and national income. It's a broad aggregate measure, not specific to individual markets or units.
• Therefore, the external value of currency is not studied in microeconomics; it falls under macroeconomics.
About This Chapter: Introduction to Business Economics
Paper
Paper 4: Business Economics
Weightage
5%
Key Topics
Meaning, Scope, Price Mechanism
This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.
View Official ICAI SyllabusExam Strategy Tip
Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.
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