Normative analysis is concerned with "what ought to be," while positive analysis is concerned with "what is."
Indicate whether the statement is true or false
TRUE
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A 50 percent tax on the profits of a monopolist will
A. be totally shifted to the consumer. B. raise price and lower quantity. C. cause no change in profit-maximizing price and quantity. D. change price but not quantity.
Li works for a wage of $9 per hour. He has 50 hours to devote to work or leisure. If his wage rises to $11 per hour, _____
a. he will spend more time working because his opportunity cost of leisure will rise b. he will spend less time working because his opportunity cost of leisure will rise c. he will spend less time working because his opportunity cost of leisure will fall d. he will spend more time working because his opportunity cost of labor will rise
With a fixed amount of capital, 300 workers produce 9,000 cars. The average labor productivity is
A. 0.03. B. 3. C. 27. D. 30.
Answer the following statements true (T) or false (F)
1. Bonds issued by the Federal government are riskier than bonds issued by corporations. 2. The key difference between bonds and stocks is that stocks' income streams are more predictable than those of bonds. 3. Stocks represent a debt, and buyers of stock expect to earn interest. 4. An investment's rate of return is positively related to the price paid for it. 5. Stock investors can earn a return from stocks only in the form of dividends.