b.
Positive economic statements are used to explain economic behaviour, while normative economic statements are used to predict economic behaviour.
c.
Positive economic statements are descriptive in nature, while normative economic statements involve value judgments.
d.
Positive economic statements involve value judgments, while normative economic statements are descriptive in nature.
ANSWER:
c
119. An economic study concludes that providing reduced tuition fees to students that come from low-income families will increase the postsecondary participation rate. What is this conclusion an example of?
a.
positive analysis
b.
the fallacy of composition
c.
normative analysis
d.
negative economic analysis
ANSWER:
a
120. Which of the following is a normative statement?
a.
Reducing the money supply leads to higher market interest rates.
b.
An increase in business taxes will cause higher unemployment.
c.
An increase in tariffs will lead to an increase in government revenue.
d.
Wards of the state should be given free post-secondary education.
ANSWER:
d
121. In economics, what is considered to be a trade-off with freedom?
a.
exports
b.
education
c.
money
d.
fairness
ANSWER:
d
122. Which objective would lead someone to suggest that government intervention was necessary?
a.
fairness
b.
efficiency
c.
freedom
d.
stability
ANSWER:
a
123. Which of the following topics do economists generally NOT agree on?
a.
rent control
b.
import tariffs
c.
export restrictions
d.
government spending
ANSWER:
d
124. U.S. President Harry Truman once said that he wanted to find a one-armed economist because his economic advisors always said, "On the one hand . . . and on the other hand . . ." Truman recognized that the advice of economists is often ambiguous. Why is their advice often ambiguous?
a.
They are often unable to identify the critical questions involved in policy issues.
b.
They are aware that trade-offs are involved in most policy questions.
c.
They have difficulty seeing the fallacy of composition.
d.
They have much disagreement over positive statements.
ANSWER:
b
125. Consider the statement, “An increase in the provincial minimum wage will provide a living wage for 35 000 people.” What kind of statement is this?
a.
a statement of positive economics
b.
a fallacy of composition statement
c.
a tautology-type statement
d.
a statement of normative economics
ANSWER:
a
126. What is the result of economic choices or trade-offs?
a.
poverty
b.
overproduction
c.
scarcity
d.
unemployment
ANSWER:
c
127. Which of the following statements best describes scarcity?
a.
Scarcity and poverty are basically the same thing.
b.
Goods are scarce because of greed.
c.
Even in the wealthiest of countries, the desire for material goods is greater than productive capabilities.
d.
The absence of scarcity means that a minimal level of income is provided to all individuals.
ANSWER:
c
128. What does scarcity imply?
a.
At current market prices, consumers are willing to purchase more of a good than suppliers are willing to produce.
b.
It is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available.