Given below are two statements:
Statement I: In economics, a household can be treated as an individual decision making unit.
Statement II: A firm cannot be an individual decision making unit, as it is made up of many persons.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Statement I is true but Statement II is false.
Statement I: In economics, a household can be treated as an individual decision making unit. — True. A decision making unit can be one person or a group such as a household.
Statement II: A firm cannot be an individual decision making unit, as it is made up of many persons. — False. A group of persons can still be one unit. A firm, like a household or any other organisation, takes its decisions as one unit.
NCERT (2026-27): “By individual, we mean an individual decision making unit. A decision making unit can be a single person or a group like a household, a firm or any other organisation.” |