quiz 2.6

Which of the following statements is a positive statement? A. Online shopping increased by 50 percent this Christmas season. B. Too many people are unemployed. C. Our country must increase military spending. D. We need to spend less on luxury items for the wealthy, and more on necessities for the less fortunate. E. There should be a computer in every elementary school classroom.

A

Which of the following statements is an example of positive economic analysis? A. Universities should offer a wider variety of extracurricular activities to broaden the horizons of their student bodies. B. To ensure the highest graduation rates, colleges should limit enrollment. C. As tuition rates increase, fewer students are enrolling in college. D. Living in a dorm is too expensive and colleges should subsidize the cost of housing for their students.

C

Normative economic analysis involves

value judgments and opinions.

Which of the following is a normative economic statement? A. Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable. B. With rising mortgage rates and rising unemployment rates, the number of unsold homes has increased. C. Rising global demand for coal has led to increases in the price of coal. D. The state of Texas is considering increasing funds for light-rail development to promote the use of public transportation.

A

Which of the following is a positive economic statement? A. If the price of beef falls, a larger quantity of it will be bought. B. The standard of living in the United States is too low. C. The government should implement a national consumption tax. D. The U.S. government should increase regulations on the banking industry.

A

Which of the following is a normative economic statement? A. Rising corn prices have increased the price of corn-based ethanol. B. Farmers should not be allowed to grow and sell genetically-modified crops. C. The federal government is considering increasing regulations on the use of fossil fuels to promote the use of wind power. D. With rising home prices and falling mortgage interest rates, the amount of home foreclosures has decreased.

B

Which of the following statements about positive economic analysis is false? A. Unlike normative economic analysis, positive economic analysis can be tested. B. There is much more disagreement among economists over positive economic analysis than over normative economic analysis. C. There is much more disagreement among economists over normative economic analysis than over positive economic analysis. D. Positive analysis uses an economic model to estimate the costs and benefits of different course of actions.

B

Which of the following is a normative economic statement? A. The current high price of gasoline is the result of strong worldwide demand. B. When the price of gasoline rises, transportation costs rise. C. When the price of gasoline rises, the quantity of gasoline purchased falls. D. The price of gasoline is too high.

D

Which of the following is a positive economic statement? A. The U.S. government should not have bailed out U.S. auto manufacturers. B. The government should revamp the health care system. C. The standard of living in the United States should be higher. D. If the price of iPhones falls, a larger quantity of iPhones will be purchased.

D

"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement. T/F

True