Question

Given below are two statements:
Statement (I): Macroeconomics is the study of particular firm, particular household, individual price, income, wages, industry and particular commodity.
Statement (II): Microeconomics is the study of aggregates of individual quantities, national income, price level and national output.
In light of the above statements, choose the most appropriate answer from the options given below.

• A. Both Statement (I) and Statement (II) are true.
• B. Both Statement (I) and Statement (II) are false.
• C. Statement (I) is true but Statement (II) is false.
• D. Statement (I) is false but Statement (II) is true.

Hint:

To avoid swapping these terms, remember:
- Microeconomics \(\rightarrow\) I = Individual units (firms, households).
- Macroeconomics \(\rightarrow\) A = Aggregate economy (national income, inflation).

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
This question tests the definitions and scopes of the two main branches of economics: Microeconomics and Macroeconomics.

Step 3: Detailed Explanation:
Let us analyze each statement individually:
- Statement (I):
This statement claims that macroeconomics studies individual units like a specific firm, household, price, or commodity.
However, this is actually the definition of microeconomics.
The prefix "micro" originates from the Greek word mikros, which means small.
Therefore, Microeconomics focuses on the behavior of individual decision-making units.
Thus, Statement (I) is incorrect because it attributes individual analysis to macroeconomics.
- Statement (II):
This statement claims that microeconomics studies aggregate economic variables such as national income, general price levels, and national output.
However, this is the definition of macroeconomics.
The prefix "macro" comes from the Greek word makros, which means large.
Therefore, Macroeconomics studies the economic system as a whole.
Thus, Statement (II) is incorrect because it attributes aggregate analysis to microeconomics.
Since the definitions in both statements have been swapped, both statements are false.

Step 4: Final Answer:
Both Statement (I) and Statement (II) are false.
Therefore, the correct choice is Option (B).