Positive statements can be checked, evaluated, or edited based on:
a. available evidence.
b. personal choice.
c. budget constraints.
d. opportunity costs.
a. available evidence.
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In choice sets, intertemporal budget constraints illustrate consumption trade-offs over time.
Answer the following statement true (T) or false (F)
With respect to the labor supply curve, the income effect
A) reinforces the substitution effect. B) lowers the opportunity cost of labor. C) raises the opportunity cost of labor. D) influences a person to work less as the wage rate increases.
According to the Keynesian aggregate expenditures model, equilibrium and full employment:
A. always occur at the same income level of real GDP. B. may differ, but there is an automatic mechanism that directs the economy toward full-employment equilibrium. C. could never occur at the same level of real GDP. D. do not necessarily occur at the same level of real GDP.
Assume Pyrotex Inc. estimates the demand for its fireworks to be linear. If the current price charged by Pyrotex is such that the elasticity of demand is equal to 2.5, which of the following statements is true?
A. Pyrotex cannot increase its revenues by changing the price of fireworks. B. Pyrotex will increase its revenues by decreasing the price of fireworks. C. Pyrotex will increase its revenues by increasing the price of fireworks. D. Not enough information is provided to determine whether or not Pyrotex is currently maximizing its revenues.