Economists use ____ economic analysis to understand an individual market. They then use ____ economic analysis to guide future national economic policy
a. b and d b. macro; micro
c. positive; normative d. normative; positive
c
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The price of a cowboy hat is $100. Willie can produce a hat at a marginal cost of $130, Waylon can produce at a marginal cost of $100, and Merle can produce at a marginal cost of $85. Which of the following statements is correct?
A) The sum of producer surplus is $15. B) All three of these sellers will gain producer surplus from selling a hat. C) The sum of producer surplus is $30. D) Willie's producer surplus is $30. E) The sum of producer surplus is $45.
Suppose the government spends the same for a particular consumer under two different policies: One subsidizes the price of good x while the other is a lump sum subsidy. Which of the following is true.
A. Compared to the lump sum subsidy, the consumer will purchase more x under the price subsidy if and only if x is a normal good. B. Compared to the lump sum subsidy, the consumer will purchase less of x under the price subsidy if x is an inferior good. C. Compared to the lump sum subsidy, the consumer will purchase less of x under the price subsidy if x is a Giffen good. D. The consumer will spend the same on x under the two policy if and only if her indifference curves are kinked. E. Both (a) and (c). F. Both (b) and (c). G. All of the above. H. None of the above.
Refer to Figure 27-6. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and no fiscal or monetary policy is pursued, then at point B
A) the economy is below full employment. B) firms are operating at below capacity. C) there is pressure on wages and prices to fall. D) income and profits are falling. E) the unemployment rate is very low.
When economists say investment is autonomous, they mean that investment is independent of the level of saving
a. True b. False Indicate whether the statement is true or false