Which of the following questions would require positive analysis?
a. If the price of cotton increases by 5 percent, should we buy a new harvester?
b. If the price of cotton increases by 5 percent, how much cotton should we farm?
c. If the price of cotton decreases by 6 percent, what effect will this have on demand?
d. If the price of cotton decreases by 6 percent, should we plant more wheat?
c. If the price of cotton decreases by 6 percent, what effect will this have on demand?
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Refer to the figure above. What is the consumer surplus in the market?
A) $60 B) $90 C) $120 D) $160
The level of economic activity in a given year will cause the budget deficit to vary.
A. True B. False C. Uncertain
Federal Reserve Bank directors
A) have relatively little influence in monetary policy decisions. B) determine bank reserve requirements. C) determine bank capital requirements. D) set the federal funds rate.
If we know that the supply curve for good x fails to reflect the total cost to society of producing that good, then we know that
a. the market for good x is characterized by an externality, but we cannot determine whether the externality is positive or negative from this fact alone. b. the market for good x is characterized by a positive externality. c. the market for good x is characterized by a negative externality. d. the demand curve for good x fails to reflect the value to society of that good.