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You've purchased a car for $10,000 and now are deciding whether to have a moonroof installed for $400 and a security system installed for $200. The marginal cost of adding both the moonroof and security system is:
Positive economics is:
A)better than normative analysis because it is not subjective.
B)worse than normative economics because it is objective.
C)more objective than normative economics.
D)more subjective than normative economics.
The fact that the price of a gallon of milk is likely to be more expensive at a convenience store than at a supermarket is an example of:
A)market forces.
B)political forces.
C)social forces.
D)normative economics.
Which of the following is a normative statement?
A)Reducing the budget deficit will also reduce the balance of trade deficit.
B)Tariffs on imported cars result in higher prices for domestic auto consumers.
C)A tax cut will cause higher inflation.
D)The governments should spend more to aid the poor.
The marginal benefit of going to a movie during the week is currently $6 for you. Assume that the price of going to the movies, ($4) measures its marginal cost. Following the economic decision rule, you will
A)continue going to movies until the marginal benefit of doing so falls to zero.
B)choose not to go to any movies during the week.
C)continue going to movies until the marginal benefit of doing so falls to $4.
D)not be able to enjoy a net gain from going to the movies during the week.
Which of the following is not an example of a scarce resource?
D)None of the Above
Deciding what the distribution of income should be is an example of normative economics.
In making decisions economists use only:
A)monetary costs.
B)opportunity costs.
C)benefit costs.
D)dollar costs.
Brooke and Sandy both attend the same college and have the same expenses for tuition, books, and supplies. However, Brooke is a famous actress who could earn $2 million per year if she were not attending college while Sandy could earn $10,000 a year serving hamburgers if he were not attending college. It follows that
A)the opportunity cost of attending college is the same for both Brooke and Sandy.
B)the opportunity cost of attending college is greater for Brooke than for Sandy.
C)the opportunity cost of attending college is greater for Sandy than for Brooke.
D)the opportunity costs of attending college for Brooke and Sandy cannot be compared.
The study of individual choice is a topic in
C)normative economics.
D)Ricardian economics.

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