Supply and demand provides the basic explanatory framework for constructing both microeconomic and macroeconomic models.
Answer the following statement true (T) or false (F)
True
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Positive economic principles are those that:
A. are influenced by political ideology. B. are always correct. C. predict how people will behave. D. indicate how people should behave.
The MCE function represents the
a. marginal cost of enforcement incurred by the government b. marginal cost of the externality linked to environmental pollution c. market cost of a given environmental policy initiative d. extra cost of the engineering approach
How can a domestic producer determine whether or not it has a comparative advantage in the production of a good or service?
A) It cannot. B) by comparing the price it receives to the prices of other domestic producers C) by comparing the price it receives to the world price D) by comparing the quantity it produces to the quantity produced in the world E) by comparing the total domestic quantity to the total world quantity
When the price is below the equilibrium price, the quantity demanded
A) is less than the equilibrium quantity and the quantity supplied also is less than the equilibrium quantity. B) is less than the equilibrium quantity but the quantity supplied exceeds the equilibrium quantity. C) exceeds the equilibrium quantity and the quantity supplied also exceeds the equilibrium quantity. D) exceeds the equilibrium quantity but the quantity supplied is less than the equilibrium quantity.