Which of the following statements about positive economic analysis is true?
A) Positive analysis uses an economic model to estimate the costs and benefits of different course of actions.
B) There is much less disagreement among economists over normative economic analysis than over positive economic analysis.
C) There is much more disagreement among economists over positive economic analysis than over normative economic analysis.
D) Unlike positive economic analysis, normative economic analysis can be tested.
Answer: A
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In monopolistically competitive markets
A) price is greater than it would be in perfect competition. B) price is less than it would be in perfect monopoly. C) quantity is greater than it would be in perfect monopoly. D) All of the above.
The standard deviation of a two-asset portfolio (with a risky and a non-risky asset) is equal to
A) the fraction invested in the risky asset times the standard deviation of the non-risky asset. B) the fraction invested in the non-risky asset times the standard deviation of the risky asset. C) the fraction invested in the risky asset times the standard deviation of that asset. D) the fraction invested in the non-risky asset times the standard deviation of that asset.