Which of the following is a normative economic statement?
A) Tobacco products should be banned in all public spaces.
B) The increase in tobacco taxes has caused an increase in the price of cigarettes.
C) Better awareness of health risks has decreased tobacco use.
D) A reduction in tobacco subsidies has caused the price of tobacco to increase.
Answer: A) Tobacco products should be banned in all public spaces.
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Suppose that in a PPF graph, wheat is on the vertical axis and jets are on the horizontal axis. Moving down along the PPF, the
A) number of jets increases and the opportunity cost of jets decreases. B) number of jets increases and the opportunity cost of jets increases. C) opportunity cost of jets and wheat both increase. D) amount of wheat increases and the opportunity cost of wheat increases. E) amount of wheat increases and opportunity cost of wheat decreases.
Refer to Figure 3-5. In a free market such as that depicted above, a shortage is eliminated by
A) a price decrease, decreasing the supply and increasing the demand. B) a price increase, increasing the quantity supplied and decreasing the quantity demanded. C) a price increase, increasing the supply and decreasing the demand. D) a price decrease, decreasing the quantity supplied and increasing the quantity demanded.
Everything else held constant, an increase in the excess reserve ratio will mean ________ in the M1 money multiplier and ________ in the M2 money multiplier
A) an increase; an increase B) no change; an increase C) a decrease; a decrease D) no change; a decrease
Private schools are able to exclude students from attending classes they offer unless students have been accepted and paid tuition and fees. This suggests that education is
A) subject to the principle of rival consumption. B) subject to the free-rider problem. C) not subject to the exclusion principle. D) a public good.