The branch of economic theory that deals with the problem of allocation of resources is
Options
AMicro-Economic theory.
BMacro-economic theory.
CEconometrics.
Dnone of the above
For any discrepancies in this question, email contact@cadada.in
Introduction to Business EconomicsMTP Nov 23Question 610 of 209
All Questions Correct Answer
✅ Option a — Micro-Economic theory.
All Options:
- AMicro-Economic theory.
- BMacro-economic theory.
- CEconometrics.
- Dnone of the above
Detailed Solution & Explanation
• The question asks about the branch of economic theory concerned with resource allocation. This refers to how scarce resources are distributed among competing uses to satisfy human wants.
• Microeconomics is the branch of economics that studies the behavior of individual economic units, such as consumers, firms, and industries. A core focus of microeconomics is understanding how these individual units make decisions regarding the allocation of scarce resources to maximize their utility or profit. For example, it examines how a firm decides what to produce, how much to produce, and what resources to use, or how a consumer decides what goods and services to buy given their budget. Therefore, Micro-Economic theory directly addresses the problem of resource allocation at a disaggregated level.
• Macro-economic theory, on the other hand, deals with the economy as a whole. It focuses on aggregate phenomena like national income, employment, inflation, and economic growth. While resource allocation indirectly impacts these aggregates, macroeconomics doesn't primarily deal with the *problem* of allocating specific resources among competing uses at the individual or firm level.
• Econometrics is a field that applies statistical methods to economic data to test theories and forecast economic trends. It's a tool used in both micro and macroeconomics, but it's not a branch of economic theory that *deals with the problem* of resource allocation itself.
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.
Related Comparison Tables
More Questions from Introduction to Business Economics
A study of how increases in the corporate income tax rate will affect the nation unemployment rate is an example of
In a ______ the producer is free to set up any type of firms produce goods and services of his choice.
In the beginning the word economics was
In Economics, we use the term scarcity to mean;
In a free market economy, allocation of resources is determined by
If there is no central planning authority to make the fundamental economic decisions and thus to allocate productive resources, how can then free enterprise or capitalist economy solve its central problems?
Ready to Master Introduction to Business Economics?
Practice all 209 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.
Start Practicing — It's Free