Normative economic analysis tends to
A) generate testable hypotheses.
B) include the way someone thinks things should be or ought to be.
C) involve descriptive statements.
D) lead to empirical testing of data.
B
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Suppose a monopolist offers a $20 mail-in rebate on an item with a list price of $100. In order for the rebate to be a perfect hurdle, it must be the case that:
A. buyers use the rebate if and only if their cost of filling out the rebate is less than $20. B. all buyers with a reservation price greater than $80 use the rebate. C. some buyers with a reservation price greater than $80 use the rebate. D. buyers use the rebate if and only if they have a reservation price between $80 and $100.
If the exchange rate changes from 1 euro per U.S. dollar to 1.2 euros per U.S. dollar, the Euro has
a. appreciated, since its value has increased b. appreciated, since the price of U.S. dollars has increased c. appreciated, making U.S. goods cheaper in Euros d. depreciated, since its value has declined e. depreciated, since its value has increased
Which of the following price indexes is designed to measure changes in the prices of goods and services purchased by a typical individual?
A. Index of Leading Economic Indicators B. Producer Price Index C. Consumer Price Index D. Gross Domestic Product (GDP) Deflator
Average fixed cost for an information product would
A. remain constant as quantity increases. B. decrease constantly as quantity increases. C. increase constantly as quantity increases. D. first decrease and then increase as quantity increases.