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Which of the following is a normative microeconomic statement? Market equilibrium occurs when quantity demanded equals quantity supplied
Which of the following is a normative microeconomic statement? Market equilibrium occurs when quantity demanded equals quantity supplied. Correct Answer Dallas should lower the taxes paid by homeowners whose property value is less than $100,000. You Answered The Federal Reserve should raise interest rates when the country experiences inflation. U.S. gross domestic product has historically increased after adjusting for inflation
Question 4 0/5 pts Which of the following is most likely to be associated with the study of microeconomics? The federal national debt exceeds $22 trillion. Correct Answer General Motors' profits increased in 2012 by more than expected You Answered The total market value of all final goods and services produced in the U.S. in 1994 was $6.738 billion The U.S. unemployment rate in April was over 14 percent
Question 5 0/5 pts Which of the following is an example of capital as a factor of production? Personal computers used by teenagers to do homework and keep in touch with friends A person that provides funding for a new business venture You Answered Shares of stock in a corporation Correct Answer Camera equipment used by a photographer employed by a magazine
Expert Solution
1. The correct answer is Option B because the definition of normative microeconomics statement is that it reflects an ideological perspective judgment towards economic development, it is something that cannot be proven incorrect unless experimented. Hence, the lowering of taxes by Dallas for households whose property value is under $100,000 is just a judgment based on some rationale without any economic backing ( present in this sentence).
2. According to the definition, microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. In the correct option of Question 4, the statement talks about the increase in profits of a particular firm- General Motors, in 2012 and not the automobile industry as a whole. Hence, the profit increase in a single firm is a microeconomic concept.
3. Capital as a factor of production is the machinery, tools and buildings humans use to produce goods and services. Hence, camera equipment is a necessary tool that a photographer must use in order to produce good quality pictures for publication in the magazine he works for.
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