Which statements about economic models and theories are correct? Consider micro models and the Wagner's Law.

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Question 7:
The question asks which of the statements are correct regarding economic models and theories.

• a) Micro models focus on the decision-making behaviour of public individuals and institutions. Microeconomics primarily studies the decisions of individual economic agents like households and firms. While "public individuals" can be ambiguous, microeconomics generally covers individual decision-making. If "institutions" refers to private firms, this statement is correct.
• b) Peacock and Wiseman agrees with Wagner that a country undergoing industrialisation will experience an expansion in administrative and protection services. Wagner's Law suggests that public expenditure increases with industrialization and economic development, including administrative and protection services.