Refer to the graph shown. During the Reagan Administration (1981 to 1989), tax rates were reduced significantly, while federal defense spending rose by 80 percent. The effect of these policies on the AD curve is best shown as a movement from:

Distinguish between a positive statement and a normative statement and provide examples

What will be an ideal response?

According to the theory of utility maximization,

a. people who buy tap water apparently feel the additional benefit (compared with bottled water) offsets the additional cost b. people who buy bottled water apparently feel the additional benefit (compared with tap water) offsets the additional cost c. the marginal utility of the last gallon of bottled water consumed exceeds the marginal utility of the first gallon of tap water consumed d. the marginal utility of bottled water exceeds the marginal utility of diamonds e. bottled water must be more expensive (per gallon) than tap water