Answer the following statement true (T) or false (F)
1) Positive statements are expressions of value judgments.
2) Macroeconomics explains the behavior of individual households and business firms;
microeconomics is concerned with the behavior of aggregates or the economy as a whole.
3) Purposeful behavior implies that everyone will make identical choices.
4) Marginal analysis means that decision makers compare the extra benefits with the extra costs
of a specific choice.
1) F
2) F
3) F
4) T
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Which of the following is not a determinant of a good's price elasticity of demand?
A) the slope of the demand curve B) whether the good is a luxury or a necessity C) the share of the good in the consumer's total budget D) the passage of time
Building infrastructure is left to the government since ________
A) the cost of such projects would not be economical for any individual firm B) borrowing costs make such projects prohibitively expensive C) inflation tends to erode the real value of debt D) a natural monopoly would result if this activity were undertaken by an individual private firm