Which of the following is a normative economic statement?
a. The U.S. rate of unemployment was lower in 2004 than it was in 1994.
b. Savings accounts earn interest, whereas checking accounts do not.
c. Congress must recognize that the growing national debt is the most serious problem that the country faces.
d. The unemployment rate increases when the percentage of the labor force without jobs increases.
e. The unemployment rate among teenagers is higher than the rate among adults.
c. Congress must recognize that the growing national debt is the most serious problem that the country faces.
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What does the price elasticity of demand show?
In the market for sweaters, suppose Green's price elasticity of demand is 0.2, Smith's price elasticity is 1.2, and the price elasticity of all the other consumers is greater than 0.2 but less than 1.2 . Could the market price elasticity be less than 0.2 or greater than 1.2?
The trading losses that some banks incurred could be thought to be from trading risk, but in many cases the real cause of the losses could be attributed to moral hazard. Why was this the case?
What will be an ideal response?
A firm will begin to experience diminishing returns at the point where
A. marginal cost decreases. B. marginal product increases. C. marginal cost increases. D. Both B and C are correct.
Choosing to study for an exam until the extra benefit (e.g., improved score) equals the extra cost (e.g., the value of foregone activities) is:
A. an application of the Scarcity Principle. B. not an economic choice. C. not rational because it ignores the importance of total benefits and total costs. D. an application of the Cost-Benefit Principle.