Question : Assertion: Microeconomics studies the behavior of individual households and firms in making economic decisions.
Reason: Microeconomics aims to understand the allocation of scarce resources and the determination of prices in specific markets.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct answer is (a) Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
The assertion is true. Microeconomics is a branch of economics that focuses on the economic behavior of individual units, such as households, firms, and consumers. It examines how these units make decisions regarding resource allocation, production, consumption, and pricing.
The reason provided is a correct explanation of the assertion. Microeconomics analyzes how individual households and firms allocate scarce resources, such as labor, capital, and land, to maximize their utility or profit. It also examines the interaction of supply and demand in specific markets, which determines the equilibrium price and quantity.
Therefore, the correct answer is (a) Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
