When economists make positive statements, they are
a. speaking as scientists.
b. speaking as policy advisers.
c. making claims about how the world should be.
d. revealing that they are very conservative in their views of how the world works.
a
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Table 7-6 Number of ovens 2 2 2 2 2 2 2 2 Labor hours used 1 2 3 4 5 6 7 8 Loaves of bread produced 20 34 55 70 82 91 94 92 Table 7-6 shows a baker’s daily production relationship for bread. Diminishing returns to labor begin when the baker goes from
A. one hour of labor to two hours of labor. B. three hours of labor to four hours of labor. C. six hours of labor to seven hours of labor. D. seven hours of labor to eight hours of labor.
In a country with unusually high tax rates, one might expect that ________
A) GDP might be overstated because the government might avoid running surpluses B) GDP might be understated because its citizens might avoid reporting some of their income C) GDP might be overstated because the government might raise its outlays D) GDP might be understated because its citizens might flee the country E) after tax income should be much higher than that of countries with lower tax rates
Coffee and donuts are complements in consumption. Suppose the economy expands so that consumer income increases, and coffee is a normal good
What impact does this change in the coffee market have on the donut market under a general equilibrium analysis? A) Donut demand shifts rightward and donut price and quantity increase B) Donut demand shifts rightward, donut price increases, and donut quantity declines C) Donut demand shifts leftward, donut price declines, and donut quantity increases D) Donut demand shifts leftward and donut price and quantity decline
Which of the following factors might explain why the long-run equilibrium number of firms can in some instances exceed the socially optimal number?
a. The appropriability effect (the increase in consumers surplus following entry is not "appropriated" by entrants). b. The feedback effect (an increase in the number of firms increases the competitiveness of the market). c. The business-stealing effect (entry reduces rival firms' profits, a social loss that entrants do not account for). d. The ratchet effect (the more profits the entrants earn, the more the stockholders expect them to earn in the future).