Bongo plays drums in his parents' garage after school. What can we be sure of?
A) Bongo's drumming imposes negative externalities on others.
B) Bongo's drumming delivers positive externalities to others.
C) Bongo expects to benefit while drumming.
D) All of the above.
C
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What is the difference between positive economic analysis and normative economic analysis? Give one example each of a positive and normative economic issue or question or statement
What will be an ideal response?
In a long-run perfectly competitive equilibrium,
a. the typical firm will earn an economic profit b. price exceeds marginal cost c. barriers to entry are established by entrenched firms d. the typical firm will earn a normal profit e. marginal cost exceeds average cost
In the long run, a profit-maximizing monopolist
a. earns zero economic profit. b. produces the same amount as a perfectly competitive industry. c. receives a higher price for his output than a perfectly competitive firm. d. produces at the output level that minimizes his long-run average total cost.
Which of these is an example of a fiscal policy?
a. Allocation of funds for Social Security programs b. Purchase of foreign securities by the Fed c. Printing of new dollar notes d. Sale of U.S. Treasury bonds in the open market by the Fed