CH 1
An example of a positive economic statement is, "An increase in the price of a product causes consumers to purchase more of that product."
True
Normative economic statements refer to what should be.
True
"There should be less discrimination against women" is an example of a positive statement.
False
Which of the following would be a topic considered in the field of macroeconomics?
Studying the amazing recent growth of the Chinese economy.
Households
own and sell resources
Which of the following is an example of a positive statement?
An increase in the price of gasoline will cause a reduction in the amount purchased
Rational self-interest is equivalent to pure selfishness
False
A market
a. is often a physical place b. facilitates exchanges between buyers and sellers c. typically involves monetary transactions d. might not have well-defined geographical limits
In a circular-flow model, households supply all of the following except
goods and services
In economics, capital is defined as
human creations used in the production process
A normative economic statement
is a statement of what ought to be, not what is
A rational decision maker will take only those actions for which the expected marginal benefit
is greater than or equal to the expected marginal cost
Goods and services are exchanged in
product markets
The labor market is an example of a
resource market
Microeconomics is the study of
the economic behavior of individual decision makers
One might commit the fallacy of composition by concluding that
what is good for the individual is necessarily good for the group
Economics is best defined as the study of how
individuals decide to use scarce resources in an attempt to satisfy their unlimited wants
A resource is something that
is used to produce goods and services
The difference between positive economic statements and normative economic statements is that
positive statements are based on fact while normative statements are based on opinion