Which of the following is a normative economic statement?
A. The price of milk is too high.
B. The current high price of milk is the result of reduced worldwide supply.
C. When the price of milk rises, the quantity of milk purchased falls.
D. When the price of milk rises, the cost of milk-based products rises.
Answer: A. The price of milk is too high.
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If two goods are perfect substitutes, then the indifference curves for those two goods would be
A) upward sloping and concave to the origin. B) downward sloping and convex to the origin. C) downward sloping and straight. D) L-shaped.
Given the information in Figure 18.1, the efficient output in the corbomite industry is:
A) 0. B) Q0. C) Q1. D) Q2.
Carlos is an executive of a major corporation. Boris is a baker. Carlos earns a salary ten times as large as the salary Boris earns, and Carlos has a much larger oven for baking break
Carlos can make a loaf of bread that tastes better than Boris's bread but Boris can bake faster. A) Carlos has an absolute and comparative advantage over Boris in making bread. B) Carlos has an absolute but not comparative advantage over Boris in making bread. C) Carlos had a comparative but not absolute advantage over Boris in making bread. D) Carlos does not have an absolute or comparative advantage over Boris in making bread.
In order to assess the level of prosperity in a nation in a given year, should we examine the level of that nation's real GDP per person, or should we examine the growth rate of that nation's real GDP per person?