Normative analysis:
A. aims at determining only the economic consequences of a particular policy.
B. does not depend on the analyst's values.
C. addresses the question of whether a policy should be used.
D. focuses on the actual effects of a policy.
Answer: C
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A market based firm
A) still needs structure. B) needs no structure. C) is really not a firm. D) none of these choices.
A unit tax is
a. a tax in the form of a percentage of the value of the good taxed b. a fixed tax in the form of cents or dollars per unit of the good c. a sales tax applied to a foreign good d. any tax levied on a good e. the same as a poll tax
Which of the following statements about the price elasticity of demand is correct?
a. The price elasticity of demand for a good measures the willingness of buyers of the good to buy less of the good as its price increases. b. Price elasticity of demand reflects the many economic, psychological, and social forces that shape consumer tastes. c. Other things equal, if good x has close substitutes and good y does not have close substitutes, then the demand for good x will be more elastic than the demand for good y. d. All of the above are correct.
Which of the following is a requirement for a perfectly competitive market?
A. Sellers maximize sales. B. There are barriers to entry. C. Buyers and sellers are price takers. D. There are indivisible setup costs.