In economics the true cost of making a choice is the value of what must be given up
a. True
b. False
Indicate whether the statement is true or false
True
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
When a developing country relies on import substitution,
a. it sacrifices the gains from specialization and comparative advantage b. replaces low-cost foreign goods with high-cost domestic goods c. domestic producers, shielded from foreign competition, usually fail to become efficient d. other countries often retaliate with their own trade restrictions e. All of the answers are correct
The leader of a federal political party made the following campaign promise: "My administration will improve welfare by increasing national defense without requiring sacrifices elsewhere in the economy." This is an example of a positive statement
a. True b. False Indicate whether the statement is true or false
Questions that involve value judgments are
A. Positive questions. B. Normative questions. C. Not relevant to microeconomics. D. Objective.