Answer: A
Topic: Normative statements
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
62) A statement that "All children should receive free health care" is an example of what kind of statement?
A) a fair statement
B) a natural experiment statement
C) a normative statement
D) a positive statement
E) a statement on the margin
Answer: C
Topic: Normative statements
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
63) Which of the following statements is a normative statement?
A) Inflation has been at an all-time low this year.
B) The minimum wage should be increased to $8.50 per hour.
C) Unemployment this month has increased by less than 0.5 percentage point.
D) Additional spending on education has not produced any rise in test scores.
E) Pepsi is less expensive than Coke this week.
Answer: B
Topic: Normative statements
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
64) Which of the following is an example of a normative statement?
A) If cars become more expensive, fewer people will buy them.
B) Car prices should be affordable.
C) If wages increase, firms will fire some workers.
D) Fewer people die in larger cars than in smaller cars.
E) Cars emit pollution.
Answer: B
Topic: Normative statements
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
65) Which of the following statements is a normative statement?
A) Every American household should have health care insurance coverage.
B) Military spending as a percent of government spending decreased by 5 percent in the 1990s.
C) Welfare reform has decreased the amount the government spends on welfare.
D) The price of computers fell last year.
E) Fewer people are unemployed this year than last year.
Answer: A
Topic: Normative statements
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
66) Congress and the President passed a national health care policy. This is an example of
A) the government using economic tools to make policy decisions.
B) answering the "how" question.
C) increasing the marginal cost of health care.
D) increasing the marginal benefit of health care.
E) normative versus positive economics.
Answer: A
Topic: Government economic policy
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
67) Opportunity cost is best defined as
A) how much money is paid for something.
B) how much money and time it takes to consume something.
C) the value of the highest-valued alternative that is forgone in making a choice.
D) the total of all other alternatives that are forgone in making a choice.
E) the sunk cost of any decision.
Answer: C
Topic: Opportunity cost
Skill: Level 1: Definition
Section: Checkpoint 1.2
Status: Old
AACSB: Reflective thinking
68) John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is the opportunity cost of attending the concert for John?
A) attending a movie
B) studying for an economics exam
C) answering his e-mail
D) attending a movie, studying for an economics exam, and answering his e-mail
E) going to the concert because that is what John chooses to do
Answer: A
Topic: Opportunity cost
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Analytic skills
69) Jamie has enough money to buy either a Mountain Dew, or a Pepsi, or a bag of chips. He chooses to buy the Mountain Dew. The opportunity cost of the Mountain Dew is
A) the Pepsi and the bag of chips.
B) the Pepsi or the bag of chips, whichever is the highest-valued alternative forgone.
C) the Mountain Dew.
D) the Pepsi because it is a drink, as is the Mountain Dew.
E) zero because he enjoys the Mountain Dew.
Answer: B
Topic: Opportunity cost
Skill: Level 2: Using definitions
Section: Checkpoint 1.2
Status: Old
AACSB: Analytic skills
70) Amy can study for an hour or spend that hour sleeping or going out for dinner. If she decides to study for the hour, the opportunity cost of the hour spent studying is