A subjective analysis of "what should be" in the economy is referred to as
A) positive economics.
B) normative economics.
C) command economics.
D) implicit economics.
B
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An increase in price will decrease demand.
Answer the following statement true (T) or false (F)
A publisher is deciding whether or not to invest in a new printer. The printer would cost $500, and it would increase cash flows by $600 for the next two years. What is the present value of the cash flows from the investment?
a. $1100 b. $541 c. $600 d. $1041
According to the equation of exchange, if real GDP is $2 trillion and the money supply is $0.5 trillion, the velocity of money: a. must be 4
b. must be 1/4. c. must be 4 trillion. d. must be 1/4 trillion. e. cannot be determined unless we know the price level.
Mary is a waitress who, when tips are included, earns $15 per hour. Mary chooses to work 40 hours per week. Assume there are no taxes, so Mary earns $600 per week. A slowdown in the restaurant's business cuts Mary's hourly wage in half, to $7.50 per hour. To compensate Mary for the lost income, Mary's rich parents begin sending a gift of $300 per week.
(i) Design an indifference curve-budget line diagram illustrating this situation. (ii) Does Mary now choose to work more or fewer hours? Does Mary's consumption rise, fall, or remain unchanged? Is Mary now better off or worse off?