Deciding what the distribution of income should be is an example of normative economics.
Answer the following statement true (T) or false (F)
True
This statement questions what the goals of the economy should be and is thus an example of normative economics.
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How does the production possibilities frontier illustrate production efficiency?
What will be an ideal response?
Refer to the information in Scenario 8.1. If Fizzle and Sizzle sell the same output at the same price and are otherwise identical, Fizzle's profit will be
A) higher than Sizzle's by $500,000 yearly. B) higher than Sizzle's by just less than $500,000 yearly. C) zero in the long run, and Sizzle will be out of business. D) the same as Sizzle's, because Fizzle must be assigned an implicit cost of $500,000 yearly for economic rent. E) the same as Sizzle's, because Sizzle will move to a more advantageous location in order to compete.
Efficient markets theory suggests that purchasing the published reports of financial analysts
A) is likely to increase one's returns by an average of 5 percent. B) is likely to increase one's returns by an average of about 3 to 5 percent. C) is not likely to increase financial returns. D) will increase financial returns in the first year but not in following years.
Suggested donations on fundraising items sent to you in the mail is an example of:
A. loss aversion. B. positive framing. C. anchoring. D. rule of thumb.