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The narrow definition of Economics that focuses solely on using relatively scarce resources to satisfy human wants belongs to the domain of:
AApplied econometric analysis
BClassical macro economic analysis
CModern welfare economic analysis
DNeo-classical micro economic analysis
Answer & Solution
Correct answer: D. Neo-classical micro economic analysis
1. The unit calls the scarce-resource-allocation definition correct but incomplete.
2. It identifies this focus as the domain of modern neo-classical micro economic analysis.
3. Macro analysis instead studies aggregates, so the classical macro option is wrong.
4. Welfare and econometric analysis are distinct branches, not the home of this narrow definition.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 1 Unit I "Nature and Scope of Business Economics", p.1_
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