________ questions have to do with explanation and prediction; ________ questions have to do with what ought to be.
A. Negative; normative.
B. Positive; negative.
C. Affirmative; positive.
D. Econometric; theoretical.
E. Positive; normative.
E. Positive; normative.
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When the government passes a law making a particular good illegal, does it matter for the black market price and quantity if the penalties for breaking the law are imposed on the buyers or on the sellers?
What will be an ideal response?
Outline the various actions the government sector could take to promote growth
What will be an ideal response?
Suppose we advertise up to the point where the last dollar spent on advertising generates an additional dollar of sales revenue (i.e, the marginal revenue of advertising equals one)
If the full marginal cost of advertising is greater than one, then we will generate: A) less output than the profit maximizing level. B) more output than the profit maximizing level. C) the profit maximizing level of output. D) We don't have enough information to answer this question.
If long-run average costs are falling, then the firm is experiencing diseconomies of scale
Indicate whether the statement is true or false