Study Plan Chapter 1
Dr. Strangelove's theory is that the price of mushrooms is determined by the activity of subatomic particles that exist in another universe parallel to ours. When the subatomic particles are emitted in profusion, the price of mushrooms is high. When subatomic particle emissions are low, the price of mushrooms also is low. Is it possible to test this theory? A) Yes B) No
B) No
Many universities and corporations offer a health wellness program that helps their employees improve or maintain their health and get paid (a relatively small amount) for doing so. The programs vary, but typically consist of employees completing a health assesment, receiving a healthy living program, and monitoring their monthly health activities. Corporations and universities are willing to pay employees to take care of themselves because a healthier workforce: A) performs more efficiently, thereby improving overall productivity in the workplace B) translates into lower costs, in part by reducing illness-related absenteeism and premature retirements C) is a happier workforce and thus less likely to become confrontational with management D) all of the above E) A & B only
Correct Answer: E
Which of the following steps should you follow when using a formula? A) Make sure the number you calculate using the formula is economically reasonable B) Make sure you understand the economic concept the formula represents C) Make sure you are using the correct formula for the problem you are solving D) All of the above are steps you should follow when using a formula
Correct Answer: D
Why are models based on assumptions? A) Because models are very different from theories B) Because models are only concerned about questions of equity, not question of efficiency C) Because models are not intended to analyze real-world events D) Because models have to be simplified to be useful
Correct Answer: D
A firm operating in a market economy has a strong incentive to be productively efficient and allocatively efficient because the former enables it to _________ while the latter ensures it of ___________
minimize production costs, ample revenues
Equity means that goods are distributed in a way that A) is fair B) is quick C) maximizes benefits to society
Correct Answer: A
Which of the following areas of economic studies issues such as ways to reduce teenage smoking? A) Microeconomics B) Macroeconomics C) Both microeconomics and macroeconomics give equal emphasis to these problems D) This cannot be determined by the information given
Correct Answer: A
Which of the following best describes scarcity?: A) Unlimited wants exceed the limited resources available B) Markets cannot properly allocate resources C) Wants cannot be fulfilled and thus all goods must be rationed D) Prices of goods are very high
Correct Answer: A
Which of the following statements about economics as a social science is correct? A) Economics studies the actions of individuals B) Economics is not useful in analyzing the effects of government policy C) Economics uses normative analysis but not positive analysis D) Economics considers human behavior only in the context of business
Correct Answer: A
Would you expect the new and better machinery and equipment to be adopted more rapidly in a market economy or in a centrally planned economy? The new machinery and equipment would be adopted more rapidly in a A) market economy B) centrally planned economy
Correct Answer: A
Which of the following statements about an economic variable is correct? A) An economic variable is something measurable that can have different values B) An economic variable is always measured in dollars C) An economic variable must always be a positive number D) An economic variable must either be the price of a good or service or the quantity of a good or service
Correct Answer: A,
Centrally planned economies allocate resources based on decisions by A) Households and firms B) Government
Correct Answer: B
Economist assume that people are rational in the sense that: a) they do not respond to economic incentives b) they use all available information as they take actions intended to achieve their goals c) they make decisions based on total, rather than marginal, variables d) they generally make the correct choices
Correct Answer: B
Economists assume that the only reason people take the actions they do is in response to economic incentives A) True B) False
Correct Answer: B)
Economic data is used A) to prove that a model is true B) only if all relevant data is available C) to test models D) to take the place of an economic model
Correct Answer: C
Efficiency means that goods are distributed in a way that A) is quick B) is fair C) maximizes benefits to society
Correct Answer: C
The three economic questions that every society must answer are: A) What economic system will be used, how will it be implemented, and who will make market decisions? B) What are the prices of goods, how are they determined, and who will pay for them? C) What goods will be produced, how will they be produced, and who will receive the goods? D) What kind of government will the society have, how will it be run, and who will run it?
Correct Answer: C
Today, which of the following countries has a centrally planned economy? A) United States B) Canada C) North Korea D) Germany
Correct Answer: C
When an employer offers a wellness program to its employees, the health insurance premiums the employer pays on behalf of the employees are likely to ________ A) not be effected B) increase C) decrease
Correct Answer: C
Which of the following statements is correct? A) The relationship between two variables is nonlinear whether it is represented by a straight line or by a curved line B) The relationship between two variables is linear whether it is represented by a straight line or by a curved line C) The relationship between two variables is linear when it is represented by a straight line and nonlinear when it is represented by a curved line D) The relationship between two variables is linear when it is represented by a curved line and nonlinear when it is represented by a straight line
Correct Answer: C
What type of economic analysis is concerned with the way things ought to be? A) Rational Behavior B) Marginal Analysis C) Normative Analysis D) Positive
Correct Answer: C) Normative Analysis
A primary difference between macroeconomics and microeconomics is A) Microeconomics is concerned with present decisions while macroeconomics is concerned with future decisions B) There are no true differences between microeconomics and macroeconomics C) Microeconomics is concerned with market economies while macroeconomics is concerned with centrally-planned economies D) Microeconomics examines individual markets while macroeconomics examines the economy as a whole
Correct Answer: D
Allocative efficiency means that A) every good or service is distributed fairly B) a good or service is produced at the lowest possible cost C) a good or service is produced as quickly as possible D) every good or service is produced up to the point where marginal benefit is equal to marginal cost
Correct Answer: D
Economists use models A) to describe the real world exactly B) to disprove economic data C) to prove that theories are true D) to answer questions and analyze issues
Correct Answer: D
Scarcity is central to the study of economics because it implies that: A) society must make decisions at the margin B) economic agents are rational C) wants are unlimited D) every choice involves an opportunity cost
Correct Answer: D
What do economists mean by the word "marginal"? A) small B) unimportant C) first D) extra or additional
Correct Answer: D
In recent years, many doctors have decided to give up running their practices as small businesses and have become salaried employees of hospitals. Which of the following constitutes an important different between doctor's private practices and other small businesses, such as restaurants and hardware stores? A) Costly paperwork is necessary to secure payment for services rendered B) Payments are rarely received directly from the immediate customers C) Prices (or rates) are set externally D) All of the above
Correct Answer: D Most of the important differences are on the revenue side of running a business. Doctors are typically paid by third parties (i.e. insurance companies) rather than by the immediate customer, they must expend considerable effort to justify and receive payments, and the prices they receive are set externally, either by government or insurers.
Market economies allocated resources based on decisions made by A) Households and Firms B) Government
A) Household and Firms
A market system prevents people from getting as many goods and services as they want due to which of the following? A) Their income B) The government because it allocates the goods and services C) Both A and B D) Neither A nor B
Correct Answer: A
In 2013, the preseident and chief executive officer of McDonald's, Don Thompson, said that McDonald's was considering breakfast all day, instead of stopping at 10:30 A.M. on weekdays and 11:00 A.M. on weekends. Several owners od McDonald's restaurants, however, point out that offering breakfast 24 hours a day presents two logistical problems: (1) Burgers and other meets need to be cooked at a higher temperature than eggs, so it would be difficult for employees to set the grill at the right temperature for both foods; and (2) scrambled eggs require employees to continually stir, while hamburgers don't require this attention. In addition, some customers might buy the cheaper breakfast than the more expensive lunch or dinner meals. From an economics perspective, to determine whether to serve breakfast all day, McDonald's should A) compare the marginal revenue from serving breakfast all day with the marginal cost of serving breakfast all day B) compare the total revenue from serving breakfast all day with the average revenue from serving breakfast all day C) conduct customer surveys to better understand how its customers feel about the change D) calculate whether the total revenue from serving breakfast all day is positive E) compare the average cost of serving breakfast all day to the total cost of serving breakfast all day
Correct Answer: A
In a market system, how does society decide what goods and services will be produced? A) Consumers, firms, and the government determine what goods and services will be produced by the choices they make B) What goods and services will be produced is determined by a vote of consumers C) The government decides what goods and services will be produced D) Firms alone determine what goods and services will be produced
Correct Answer: A
In a paper written by Bentley College economists Patricia M. FLynn and Michael A. Quinn, the authors state: "We find evidence that Economics is a good choice of major for those aspiring to become a CEO (chief executive officer). When adjusting for size of the pool of graduates, those with undergraduate degrees in Economics are shown to have had a greater likelihood of becoming an S&P 500 CEO than any other major." A list of famous economics majors published by Marietta College includes business leaders Warren Buffet, Donald Trump, Ted Turner, and Sam Walton, as well as former presidents George H.W. Bush, Gerald Ford, and Ronald Reagan. Why might studying economics be particularly good preparation for being the top manager of a corporation or a leader in government? A) Economics teaches us how to look at the tradeoffs involved in every decision B) Economics is less of an issue as you climb the corporate ladder because you usually hire accountants to handle your money C) Economics is just as valuable to a cashier as it is for a CEO D) Management and politics have more to do with public relations than economics
Correct Answer: A
The incentive of employees to improve or maintain their health once they obtain health insurance may be _________ impacted A) positively B) negatively
Correct Answer: B
Leonard Fleck, a philosophy professor at Michigan State University, has written, "When it comes to health care in America, we have limited resources for unlimited health care needs. We want everything contemporary medical technology can offer that will improve the length or quality of our lives as we age. But as presently healthy taxpayers, we want costs controlled." Is it necessary for all economic systems to limit services such as health care? A) Yes B) No
Correct Answer: A
Scarcity implies that every society and every individual face trade-offs because scarcity means that A) human wants are greater than what available resources can produce B) government is unwilling to redistribute wealth C) people are greedy and won't share with others D) people refuse to limit their wants
Correct Answer: A
The grading system plays an important role in student learning. In their book Effective Grading: A Tool for Learning and Assessment in College, Barbara Walvoord and Virginia Anderson state that "grading infuses everything that happens in the classroom." They also argue that grading "needs to be acknowledged and managed from the first moment that an instructor begins planning a class." The grading system used by a teacher can affect the incentives of students to learn the course material by: A) altering the payoffs to achieving success on the various components of the course B) doubling the points assigned to each component of the course C) uniformly weighting all course components D) none of the above since student performance is based on innate intelligence
Correct Answer: A
The underlying reason that centrally planned economies have been less efficient seems to be that such planned economies do not give as great ______ for hard work and innovation as market economies do A) Incentives B) Revenues
Correct Answer: A
When does allocative efficiency occur? A) Allocative efficiency occurs when production is in accordance with consumer preferences B) Allocative efficiency occurs when a good or service is produced at the lowest possible cost C) Allocative efficiency occurs when an economy achieves equity D) Allocative efficiency occurs when an economy no longer relies on voluntary exchange
Correct Answer: A
When the price of Microsoft stock increased more than 27 percent in the first part of 2013, Bill Gates, who own 436 million shares of Microsoft stock, once again became the world's richest man. Does Bill Gates, the richest person in the world, face scarcity? A) Yes B) No
Correct Answer: A
According to an article in the New York Times, hospitals sometimes complain that doctors do not work as hard when they become hospital employees as they do when they operate a private practice. When a doctor closes a private practice and becomes an employee of a hospital working for a fixed salary, the incentives a doctor faces to work hard change because the doctor A) has their student loans forgiven B) has a steady income from a hospital salary that does not depend on the number of patients C) no longer has to worry about malpractice D) receives a bonus if they bring in more revenue for the hospital
Correct Answer: B
If market economies are more economically efficient than centrally planned economies, there still might be a reason to prefer having a centrally planned economy if it is more ________ A) profitable B) equitable
Correct Answer: B
Jay Bhattacharya and M. Kate Bundorf of Stanford University have found evidence that people who are obese and work for firms that have employer-provided health insurance receive lower wages than people working at those firms who are not obese. At firms that do not provide health insurance, obese workers do not receive lower wages than workers who are not obese. Regarding the question of whether health insurance provides people with an incentive to become obese, the finding of Bhattacharya and Bundorf seems: A) irrelevant since correlation does not establish causation B) relevant since the link between insurance and obesity was established while holding many other variables constant C) "off the wall," because it's common knowledge that obesity is a disease, like cancer D) irrelevant since a multitude of other factors besides the presence of health insurance can cause obesity
Correct Answer: B
Late in the semester, a friend tells you, "I was going to drop my psychology course so I could concentrate on my other courses, but I had already put so much time into the course I decided not to drop it." Is your friend's reasoning correct or incorrect? Your friend's reasoning is: A: Correct B Incorrect
Correct Answer: B
Microeconomics is the study of A) how individuals make good decisions for themselves but hurt society B) how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices C) the economy as a whole, including topics such as inflation, unemployment, and economic growth D) how individuals and firms act altruistically to better society
Correct Answer: B
Over the years the economic incentives for doctors to operate private practices as opposed to becoming salaried hospital employees have A) weakened somewhat, but a majority of doctors still operate private practices B) weakened to the extent that a majority of doctors now work for hospitals C) weakened to the extent that nearly all doctors now work as hospital employees
Correct Answer: B
Productive Efficiency means that A) every good or service is produced up to the point where marginal benefit is equal to marginal cost B) a good or service is produced at the lowest possible cost C) a good or service is produced as quickly as possible D) every good or service is distributed fairly
Correct Answer: B
Suppose economist develop an economic model and find that "it works great in theory, but it fails in practice." Which of the following should the economists do next? A) They should leave the model as is. A model does not need to explain or predict real world events B) They should revise the model in light of its failure to explain or predict real world events C) They should retest the current model, as there may have been an error in the testing methods the first time D) None of the above
Correct Answer: B
Suppose that your local police department recovers 100 tickets to a big NASCAR race in a drug raid. It decides to distribute these to residents and announces that tickets will be given away at 10 A.M. Monday morning at City Hall. Productive efficiency occurs when a good or service (such as the distribution of tickets) is produced at the lowest possible cost. Is this an efficient way to distribute the tickets? A) Yes B) No
Correct Answer: B
The prevalence of Alzheimer's dementia is very high among residents living in nursing homes. A student concludes that it is likely that living in a nursing home causes Alzheimer's dementia. What if the flaw in the student's reasoning? A) The student has failed to take into account other causes of Alzheimer's disease B) The student is drawing a false conclusion; he is making the error of reverse causality C) The student is using an inadequate sample size D) The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents
Correct Answer: B
Two students are discussing Solved Problem #1. Joe: "I think the key additional information you need to know in deciding whether the doctor should keep the medical practice open 9 hours per day rather than 8 hours is the amount of profit she is currently making while being open 8 hours. Then she can compare the profit earned from being open 9 hours with the profit earned from being open 8 hours. This information is more important than the additional revenue and additional cost of being open 1 more hour." Jill:"Actually, Joe, knowing how much profits change when the medical practice stays open 1 more hour is exactly the same as knowing the additional revenue and the additional cost." Who is correct? A) Joe B) Jill C) Neither person is correct
Correct Answer: B
Which of the following areas of economic studies issues such as whether government intervention is capable of reducing the severity of recessions A) Microeconomics B) Macroeconomics C) Both microeconomics and macroeconomics give equal emphasis to these problems D) This cannot be determined by the information given
Correct Answer: B
Which of the following is not a step that economist use in developing a useful economic model? A) Formulate a testable hypothesis B) Make a value judgement about the merits of the hypothesis C) Decide on the assumptions to be used in developing the model D) Use economic data to test the hypothesis E) Revise the model if it does not explain the data well
Correct Answer: B
Which of the following statement about the idea that people are rational is correct? A) The idea assumes that consumers and firms take into account the benefits of their actions but ignore the costs B) The idea assumes that consumers and firms use all available information as they act to achieve their goals C) The idea assumes that consumers and firms take into account the costs of their actions but ignore the benefits D) The idea assumes that consumers and firms always make correct decisions
Correct Answer: B
Which of the following statements about normative analysis is correct? A) Normative analysis is concerned with what is B) Normative analysis is concerned with what ought to be C) Normative analysis measures the costs and benefits of different courses of action D) Normative analysis should not involve value judgments
Correct Answer: B
Which of the following statements is correct? A) A business has multiple locations, while a company has only a single location B) Economists use the terms firm, company, and business interchangeably C) A company is owned by one person, while a firm is owned by more than one person D) A business is always larger than a firm
Correct Answer: B
In the United States, to receive a medical license, a doctor must complete a residency program at a hopsital. Hospitals are not free to expand their residency programs in a particular medical specialty without approval from a Residency Review Committee (RRC), which is made up of physicians in that specialty. A hopsital that does not abide by the rulings of the RRC runs the risk of losing its accreditation from the Accreditation Council for Graduate Medical Education (ACGME). The ACGME and the RRCs argue that this system makes it possible to ensure that residency programs do not expand to the point where they are not providing residents with high-quality training. This system may help protect consumers by ensuring that A) accrediting bodies maintain command and control B) future doctors receive high-quality training C) hospitals do not police themselves When it comes to assessing how this system affects the financial interests of doctors and the well being of consumers, it may be that the former gain more simply because A) there are far fewer of them, hence each stands to gain much from supply restrictions B) they are the sellers of health care, and sellers always benefit more than buyers
Correct Answer: B, A Any attempt to determine whether or not this is a good system must focus on its costs and benefits. The proper (economic) way to assess the value of the system is to weigh its benefits against its costs. Much of this falls under the realm of positive economics, but value judgments (normative economics) inevitably enter any final determination.
According to the FBI Bank Crime Statistics, there were more than 5,000 bank robberies in the United States in 2012. The FBI claims that banks have allowed themselves to become easy targets by refusing to install clear acrylic partitions, called bandit barriers, which separate bank tellers from the public. According to a special agent with the FBI, "Bandit barriers are a great deterrent. We've talked to guys who rob banks, and as soon as they see a bandit barrier, they go find another bank." Despite this finding, many banks have been reluctant to install these barriers. Wouldn't banks have a strong incentive to install bandit barriers to deter robberies? Why, then, do so many banks not do so?: A) Banks are not interested in the safety of their customers and employees B) Banks are not rational C) Banks have no economic incentive to install the barriers D) Banks would not receive any benefits from installing the barriers
Correct Answer: C
Consider the following statement: "The problem with economics is that it assumes that consumers and firms always make the correct decisions. But we know that everyone makes mistakes." What is the most correct response to this statement?: A) Economics has a lot of problems such as those that caused the Great Recession B) Economics does assume that consumers and firms always make the correct decisions C) Economics assumes that consumers and firms are rational, not that they always make the right decisions D) Economics is a proven field of study, and it has already solved this problem
Correct Answer: C
Economists believe that an activity should be continued up to the point where A) the marginal benefit from the activity plus the marginal cost equals zero B) the marginal benefit from the activity is less than the marginal cost C) the marginal benefit from the activity is equal to the marginal cost D) the marginal benefit from the activity is greater than the marginal cost
Correct Answer: C
In 2013, the preseident and chief executive officer of McDonald's, Don Thompson, said that McDonald's was considering breakfast all day, instead of stopping at 10:30 A.M. on weekdays and 11:00 A.M. on weekends. Several owners od McDonald's restaurants, however, point out that offering breakfast 24 hours a day presents two logistical problems: (1) Burgers and other meets need to be cooked at a higher temperature than eggs, so it would be difficult for employees to set the grill at the right temperature for both foods; and (2) scrambled eggs require employees to continually stir, while hamburgers don't require this attention. In addition, some customers might buy the cheaper breakfast than the more expensive lunch or dinner meals. Would McDonald's decision have to be all or nothing-- either serve breakfast only up to 10:30 A.M. or serve breakfast all day? A) Yes, because it would be difficult for employees to set the grill at the right temperature for both foods B) No. The employees could learn to adjust to this situation and serve breakfast all day as well as lunch and dinner C) No. McDonald's could evaluate serving items from the breakfast menu that could be cooked in better coordination with the dinner menu for a period after 10:30 A.M D) Yes, because customers would want it to be all or nothing
Correct Answer: C
In a market system, how does society decide who will receive the goods and services produced? A) Firms determine who receives the goods and services produced B) Consumers determine who receives the goods and services produced C) Who receives the goods and services produced depends largely on how income is distributed D) The government determines the goods and services produced
Correct Answer: C
Macroeconomics is the study of A) how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices B) the economy on a state-by-state basis, covering areas affected by the Commerce Clause C) the economy as a whole, including topics such as inflation, unemployment, and economic growth D) why the U.S. has spent so much money on wars and government surveillance of its own citizens
Correct Answer: C
Relative to a market economy, a centrally-planned economy would be expected to be A) better at both productive efficiency and allocative efficiency because entrepreneurial greed doesn't exist there B) better at allocative efficiency but not productive efficiency because consumers can be forced to buy in government shops but firms managers can be wasteful because there is no profit motive C) better at neither productive efficiency nor allocative efficiency because the absence of market-imposed competition negates the need of firms to satisfy consumer wants or produce using the lowest-cost methods D) better at productive efficiency but not allocative efficiency because costs can be controlled by the government but consumer tastes cannot
Correct Answer: C
Which of the following statements about positive analysis is correct? A) Positive analysis involves value judgments B) Positive analysis can be used to determine whether policies are good or bad C) Positive analysis is concerned with that is D) Positive analysis is concerned with what ought to be
Correct Answer: C
____________ is a problem that occurs when someone concludes that a change in variable X caused a change in variable Y when, in fact, it is a change in variable Y that caused a change in variable X. A) The positive-to-negative relationship B) Nonlinear slope C) Reverse causality D) The omitted variable
Correct Answer: C
How are economic resources allocated in a market economy? A) by firms acting alone B) by consumers acting alone C) by the government D) by the decisions of households and firms interacting in markets
Correct Answer: D
In a market system, what determines how goods and services will be produced? A) The government determines how goods and services will be produced B) Consumers determine how goods and services will be produced C) Consumers, firms, and the government determine together how goods and services will be produced D) Firms determine how goods and services will be produced
Correct Answer: D
Jay Bhattacharya and M. Kate Bundorf of Stanford University have found evidence that people who are obese and work for firms that have employer-provided health insurance receive lower wages than people working at those firms who are not obese. At firms that do not provide health insurance, obese workers do not receive lower wages than workers who are not obese. Firms that provide workers with health insurance may pay a lower wage to obese workers than to workers who are not obese because the latter tend to be healthier and consequently A) more productive at work B) less costly to insure and therefore employ due to their lower claim submission rate C) experience lower rates of absenteeism and early retirement D) all of the above E) A & B only
Correct Answer: D
Suppose that your local police department recovers 100 tickets to a big NASCAR race in a drug raid. It decides to distribute these to residents and announces that tickets will be given away at 10 A.M. Monday morning at City Hall. What is the actual cost and also the opportunity cost of distributing the tickets this way? A) The activities that cannot be done (such as earning money at work) when one is standing in line B) The cost of people blocking traffic in and around City Hall C) The cost of travel to City Hall D) All of the above E) A and B only
Correct Answer: D
Which of the following is a correct statement about a mixed economy? A) In a mixed economy, most economic decisions are made by the government but markets plays a significant role in the allocation of resources B) In a mixed economy, the government makes all economic decisions C) In a mixed economy, all economic decisions are made in markets D) In a mixed economy, most economic decisions are made in markets but the government plays a significant role in the allocation of resources
Correct Answer: D
Which of the following statements about a hypothesis is correct? A) To be called a hypothesis, a statement must first be shown to be correct B) A hypothesis will always incorporate a value judgment C) A hypothesis is another name for a model D) A hypothesis is a statement that could in principle turn out to be incorrect
Correct Answer: D
Which of the following statements is correct? A) The word "technology" and the word "invention" have the same meaning B) An invention is the practical application of an innovation C) The word "technology" and the word "innovation" have the same meaning D) an innovation is the practical application of an invention
Correct Answer: D
The Making the Connection explains that there are both positive and normative elements to the debate over whether medical schools should charge tuition and whether hospitals should continue to pay residents who pursue primary care but not residents who specialize. A) Age distribution characteristics of the population by geographic region B) Physician incomes by specialty and geographic region C) Med school tuition rates, applications, and enrollments D) Poverty rates by geographic region E) All of the above Assuming that these statistics are available or could be gathered, are they likely to resolve the normative issues in this debate? A) No, because normative issues involve value judgments that incorporate an individual's full range of experiences, beliefs, and emotions B) Yes, the quantitative analysis of hard economic data leaves no unsettled questions. Subjective considerations cannot override objective analysis
Correct Answer: E, A
If a firm is productively and allocatively efficient, it earns _______; if it is not, it _______
a profit, suffers a loss
Indicate which of the following statements represent positive analysis and which represent normative analysis a. A 50-cent-per-pack tax on cigarettes will reduce smoking by teenagers by 12 percent. This represents __________ b. The federal government should spend more on AIDS research. This represents _____________ c. Rising paper prices will increase textbook prices. This represents _____________ d. The price of coffee at Starbucks is too high. This represents _____________
a. Positive b. Normative c. Positive d. Normative
Suppose that your local police department recovers 100 tickets to a big NASCAR race in a drug raid. It decides to distribute these to residents and announces that tickets will be given away at 10 A.M. Monday morning at City Hall. The groups of people that are most likely to get the tickets will be those for whom the expected marginal ________ of going to City Hall on Monday morning are greater than the expected marginal __________
benefits, costs
