Positive analysis can be described as
A) the study of whether people respond to positive incentives.
B) the study of whether people respond to negative incentives.
C) a value-free approach to inquiry.
D) a study that is not tested empirically.
Answer: C
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Paternalism leads people to:
A. use their abilities as well as possible and purchase only what they need regardless of price. B. buy only what they need instead of what they want because doing otherwise is bad environmental stewardship. C. make decisions that are good for themselves that they might not have made on their own. D. consider what their parents would do when making decisions even though they themselves might not make those same decisions.
The theory of consumer behavior assumes that consumers attempt to maximize:
A. the difference between total and marginal utility. B. total utility. C. average utility. D. marginal utility.
The number of vehicle types available in the United States has increased dramatically over the past thirty years. Everything else equal, this would make
A) the demand for individual vehicle types to become less elastic. B) the demand for individual vehicle types to become more elastic. C) the demand for all vehicle types to become unitary elastic. D) the demand for low quality vehicle types to become less elastic.
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.