Macroeconomics - True or False: 1

1) Opportunity cost is the cost of obtaining an opportunity.

The statement is false.

The opportunity cost is referred to as the cost of the next best option available. It is also known as the alternative cost. It is the value of the next alternative which needs to give up whenever a person chooses between two available options.

2) Positive economics is an economic activity for positive results.

The statement is false.

Positive economics is also known as descriptive economics. It focuses on the description, explanation of economic theories, and phenomena. Positive economics is based on facts and figures which are verifiable. These facts can be further proved or disproved.

3) Beef and chicken are normal goods.

This statement is true.

The normal goods are those goods whose consumption increases with an increase in the income of a person. They show the direct relationship between income and consumption of goods. There is also a direct relationship between income and consumption of beef and chicken because a consumer will consume more of both as the income rises.

4) Peanut Butter and Jelly are Complements Goods.

The statement is true.

Complementary goods are those goods which are consumed together. If there is a rise in the price of one good, then there will be a reduction in demand for the complementary good, for example, shoes and polish, car and petrol, peanut butter and jelly, and so on.

5) The shifts of both the demand curve and supply curve result in the price increase.

The statement is false because the magnitude and direction of the shift are unknown. So, there could be a reduction in price if demand and supply both curve shift leftward.