The Incentive Principle is an example of:
A. a normative economic principle.
B. a positive economic principle.
C. an economic decision-making pitfall.
D. over-estimating the benefits of an action.
Answer: B
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Which factor of production is paid "profit"?
A) entrepreneurship B) human capital C) labor D) land E) capital
The government budget involves:
A. money coming in as tax revenues. B. money going out through government purchases. C. money going out to individuals for programs that do not involve goods or services. D. All of these are true.
Higher education creates
a. side payments b. negative externalities c. a wedge between marginal social cost and marginal private cost d. positive externalities e. economic efficiency
If marginal cost is below average total cost, then average total cost
a. is constant. b. is falling. c. is rising. d. may rise or fall depending on the size of fixed costs.