Madhya Pradesh Board Class 12 Economics — Flashcards for Quick Revision

A: Scarcity refers to the situation where human wants and needs are unlimited but resources available to satisfy them are limited. This fundamental economic problem forces individuals and societies to ma

A: Goods are physical, tangible objects used to satisfy people's wants and needs (e.g., food, clothing, books). Services are intangible activities that satisfy wants and needs (e.g., teaching by teachers

A: Opportunity cost is the cost of having a little more of one good in terms of the amount of another good that has to be forgone. Example: If a family wants a bigger house, they may have to give up the

A: Microeconomics studies individual economic agents (consumers, firms) and their decision-making in specific markets, focusing on maximizing personal profit or satisfaction. Macroeconomics studies the e

A: Economic agents are individuals or institutions that take economic decisions. Examples include: consumers (decide what to consume), producers (decide what to produce), government (taxation, spending d

A: Macroeconomists use a representative good to simplify analysis because: 1) Output levels of different goods tend to move together, 2) Prices of different goods generally rise or fall simultaneously, 3

A: Utility is the want-satisfying capacity of a commodity. It is subjective because different individuals can get different levels of utility from the same commodity. For example, someone who likes choco

A: Total Utility (TU) is the total satisfaction derived from consuming a given amount of a commodity. Marginal Utility (MU) is the change in total utility due to consumption of one additional unit. Formu

A: The Law of Diminishing Marginal Utility states that marginal utility from consuming each additional unit of a commodity declines as its consumption increases, while keeping consumption of other commod