The perpetual problem of scarcity forcing people to make choices is the basis for the definition of economics.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2Economists use ____ economic analysis to understand an individual market. They then use ____ economic analysis to guide future national economic policy.
a. b and d b. macro; micro
c. positive; normative d. normative; positive
QUESTION 3Which phrase(s) is (are) associated with normative statements?
a. c and e.
b. Has been shown.
c. Should be.
d. Can be.
e. More than.
QUESTION 4Normative economics deals with ____ and positive economics deals with ____.
a. what should be; what is
b. fiction; fact
c. microeconomics; macroeconomics
d. negative aspects; positive aspects
e. changing circumstances; same circumstances
QUESTION 5The Secretary of Labor states that wage rates in the country have risen by 2 percent this past year. The head of a local labor union states that wage gains have not kept pace with the 3 percent rate of inflation. The Secretary's statement is a (n) ____ economic statement, and the labor head's statement is a (n) ____ economic statement.
a. normative; normative
b. normative; positive
c. positive; normative
d. positive; positive
e. proper; improper
QUESTION 6Which of the following is the best example of a normative economic statement?
a. A rise in gasoline prices will cause gasoline purchases to fall.
b. The federal government should spend more on health care.
c. Raising the minimum wage will result in greater unemployment.
d. If more money is printed, then the economy's price level will rise.
QUESTION 7The government should provide health care for all citizens. This statement is an illustration of:
a. positive economic analysis. b. correlation analysis.
c. fallacy of association analysis. d. normative economic analysis.
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