If the dollar price of a good manufactured in the U.S. is $6 and the dollar price of the same good manufactured in India is $8, should retailers of the good in the U.S. purchase the good from Indian suppliers or from American suppliers?
What will be an ideal response?
The ratio of dollar price of U.S. toy to the dollar price of an Indian toy is 6/8 = 0.75. Since this ratio is less than one, toy resellers in the U.S. should purchase toys from American suppliers rather than Indian suppliers.
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A) This is a positive statement and is not in the social interest if the marginal benefit of Internet access exceeds the marginal cost. B) This is a positive statement and is not in the social interest if the marginal cost of Internet access exceeds the marginal benefit. C) This is a normative statement and is not in the social interest if the marginal benefit of Internet access exceeds the marginal cost. D) This is a normative statement and is not in the social interest if the marginal cost of Internet access exceeds the marginal benefit.
Suppose you came across the following headline in a story of a daily newspaper: "Automobile prices are so high right now that there must be a shortage. As a consequence not everyone who needs an automobile will be able to buy one"
Is this statement necessarily correct?