A(n) ______ statement is a subjective, contestable statement that attempts to describe what should be done.
a. objective
b. positive
c. normative
d. negative
c. normative
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A consumer's utility is maximized when: a. the dollar amount spent on each good is the same
b. the marginal utility of each good purchased is the same. c. the price of each good is the same. d. None of the above are generally true.
The market demand curve for a particular good
a. will shift to the right if more consumers enter the market b. could shift to the left if more consumers enter the market c. will be upward sloping if the good is an inferior good d. will always shift to the right if consumers' incomes increase e. could shift downward if more consumers enter the market
Which of the following statements is incorrect?
A. Changes in the composition of the population affect the demand for a product. B. As a greater fraction of the population becomes elderly, the demand for medical services will tend to increase. C. As the population rises, the market demand curve shifts to the right. D. None of the statements associated with this question are incorrect.
If a production process creates pollution, a competitive market produces excessive pollution because
A) the firms do not include the social cost of the pollution in their profit-maximizing decisions. B) the firms place too high a price on society's cost of inflation. C) people are not injured by the pollution. D) zero pollution is optimal.