What are some of the benefits of positive economics?

It can help test and verify economic theories and hypotheses

It can help inform and guide normative economic decisions

It can help improve the understanding of economic behavior and outcomes

What are some of the challenges of normative economics?

It may not account for ethical and moral implications of economic decisions

It may be difficult to obtain reliable and accurate data for analysis

It may be influenced by personal biases and ideological assumptions

What are some of the challenges of positive economics?

It may be difficult to obtain reliable and accurate data for analysis

It may be influenced by personal biases and ideological assumptions

It may not account for ethical and moral implications of economic decisions

What are the main advantages of a market economy?

It allows for more individual freedom and incentives

It allows for more government intervention and regulation

It allows for more social welfare and equality

It allows for more collective decision making and cooperation

What are the three basic economic questions that every society must answer?

What goods and services to produce, how to produce them, and for whom to produce them

How to allocate scarce resources, how to distribute income, and how to ensure equity

How to promote efficiency, how to encourage innovation, and how to maintain stability

How much to save, how much to invest, and how much to consume

What does “productivity” refer to?

The quantity of goods and services produced from each unit of labor input.

The quantity of goods and services produced from each unit of capital input.

The quantity of goods and services consumed per person.

The quantity of goods and services exported minus the quantity imported.

What does it mean for a producer to have a comparative advantage in producing a good?

The producer can produce the good at a lower opportunity cost than another producer

The producer can produce more of the good than another producer with the same resources

The producer can produce the good at a lower absolute cost than another producer

What does it mean if a country has a high GNP but low GDP?

Citizens earn significant income from overseas investments

The country has low exports and high imports

The country has high exports and low imports

Foreigners earn significant income from investments within the country

What does it mean to think at the margin?

To compare the additional benefits and costs of a decision

To focus on the total benefits and costs of a decision

To consider the average benefits and costs of a decision

To ignore the sunk costs of a decision

What does the slope of a demand function represent?

The change in quantity demanded when price changes by one unit

The change in income when quantity demanded changes by one unit

The change in quantity demanded when income changes by one unit

The change in price when quantity demanded changes by one unit

What does the slope of a supply function represent?

The change in quantity supplied when price changes by one unit

The change in price when quantity supplied changes by one unit

The change in quantity supplied when cost changes by one unit

The change in cost when quantity supplied changes by one unit

What is a demand curve?

A graph that shows how much consumers are willing and able to buy at various prices

A graph that shows how much producers are willing and able to buy at various prices

A graph that shows how much producers are willing and able to sell at various prices

A graph that shows how much consumers are willing and able to sell at various prices

What is a market equilibrium?

The situation where there is no excess supply or excess demand

The situation where supply equals demand

The situation where the market price and quantity are determined by supply and demand

What is a price ceiling?

A legal maximum price that one pays for some good or service

A legal minimum price that one pays for some good or service

A legal maximum quantity that one sells of some good or service

A legal minimum quantity that one sells of some good or service

What is a price ceiling?

A legal maximum price that one pays for some good or service

A legal maximum quantity that one sells of some good or service

A legal minimum quantity that one sells of some good or service

A legal minimum price that one pays for some good or service

What is a price floor?

A legal minimum price that one pays for some good or service

A legal minimum quantity that one sells of some good or service

A legal maximum quantity that one sells of some good or service

A legal maximum price that one pays for some good or service

What is a price floor?

A legal minimum price that one pays for some good or service

A legal maximum price that one pays for some good or service

A legal minimum quantity that one sells of some good or service

A legal maximum quantity that one sells of some good or service

What is a production possibilities frontier?

A graph that shows the trade-off between two goods that an economy can produce

A graph that shows the various combinations of output that an economy can produce

A graph that shows the opportunity cost of producing one good in terms of another good

What is a supply curve?

A graph that shows how much producers are willing and able to sell at various prices

A graph that shows how much producers are willing and able to buy at various prices

A graph that shows how much consumers are willing and able to buy at various prices

A graph that shows how much consumers are willing and able to sell at various prices

A compulsory payment to the government by individuals or firms

A compulsory payment to a charity by individuals or firms

A voluntary payment to a charity by individuals or firms

A voluntary payment to the government by individuals or firms

A compulsory payment to the government by individuals or firms

A compulsory payment to a charity by individuals or firms

A voluntary payment to a charity by individuals or firms

A voluntary payment to the government by individuals or firms

What is an example of a normative economic statement?

The government should increase taxes on the wealthy to reduce inequality

The trade deficit between the US and China was $74.4 billion in March 2021

The inflation rate in the US was 4.2% in April 2021

The GDP growth rate in China was 18.3% in the first quarter of 2021

What is an example of a positive economic statement?

The unemployment rate in India is 7.3% as of April 2021

The government should provide a universal basic income to all citizens

The central bank should lower the interest rate to stimulate the economy

The minimum wage should be increased to reduce poverty