In conducting normative analysis, economists apply
A. the principle of comparative advantage.
B. the principle of individual sovereignty.
C. the law of one price.
D. objective value judgments.
B. the principle of individual sovereignty.
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Money market mutual fund shares function like
A) checking accounts that pay interest. B) bonds. C) stocks. D) currency.
Capital and labor are distinct from productivity in that ________
A) productivity is independent of technology changes B) productivity can only increase over time C) productivity is subject to diminishing returns D) capital and labor are subject to diminishing marginal returns
Which of the following is an example of a situation where a third party benefits from a market transaction by others?
a. Inoculation against communicable diseases b. An increase in the level of air pollution in neighborhoods near a power plant c. Allowing a chemical company to use a natural lake to discharge waste d. Two firms trading pollution credits to avoid reducing their toxic emissions
A bond with a $90,000 face value sells at a $10,000 discount one year prior to maturity. What is the nominal interest rate paid by the bond?
a. 8.0%. b. 8.9%. c. 11.1%. d. 12.5%.