Positive economics does not require us to believe that actual happiness is the same as utility as modeled in economic theory.
Answer the following statement true (T) or false (F)
True
Rationale: Positive economics is just about making good predictions -- not about the realism of the underlying framework. Even if utility theory does not accurately describe happiness or fulfillment, the theory is a good positive theory so long as it predicts well.
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When a firm can achieve economies of scale by expanding, its long-run ATC curve:
A. slopes downward. B. slopes upward. C. is flat. D. Any of these is possible.
Traditional economic models assume that people care about:
A. relative consumption. B. absolute consumption. C. both absolute and relative consumption. D. neither absolute nor relative consumption.
Excess capacity for a firm in an oligopoly situation
A. cannot contribute to long run profit for a firm. B. is a deterrent to entry in the market by potential competitors. C. will be temporary if the planning was done right. D. encourages competitors to enter the market and build at optimal capacity.
If the price level in Japan is 1.0, the price level in the U.S. is 2.0, and it costs 100 Yen to buy one dollar, then the real exchange rate between the U.S. and Japan is
A) 2. B) 10. C) 50. D) 100. E) 200.