question
Economics studies choices that arise from one fact. What is that fact?
answer
Everyone faces scarcity.
question
On Friday, May 14, 2009, the following headlines appeared in The Wall Street Journal.
1. US Set to Rethink Fed's Role
2. Wal-Mart Makes Electronics Push
3. VW, Porsche Take Break in Talks
4. Economists Foresee Protracted Recovery
Macroeconomic topics are dealt with in ____. Microeconomic topics are dealt with it ___.
1. US Set to Rethink Fed's Role
2. Wal-Mart Makes Electronics Push
3. VW, Porsche Take Break in Talks
4. Economists Foresee Protracted Recovery
Macroeconomic topics are dealt with in ____. Microeconomic topics are dealt with it ___.
answer
Macroeconomics is the study of the aggregate (or total) effects on the national economy and the global economy of the choices that individuals, businesses, and governments make.
"US Set to Rethink Fed's Role" is a macroeconomic topic because it concerns the Fed. The Fed is in charge of U.S. monetary policy.
"Economists Foresee Protracted Recovery" is a macroeconomic topic because it concerns the recession in the national and global economy.
Microeconomics is the study of the choices that individuals and businesses make and the way these choices interact and are influenced by governments.
"Wal-Mart Makes Electronics Push" is a microeconomic topic because it studies an issue that concerns one businesslong dash—Wal-Mart.
"VW, Porsche Take Break in Talks" is a microeconomic topic because it studies an issue that concerns the decisions of two businesses.
"US Set to Rethink Fed's Role" is a macroeconomic topic because it concerns the Fed. The Fed is in charge of U.S. monetary policy.
"Economists Foresee Protracted Recovery" is a macroeconomic topic because it concerns the recession in the national and global economy.
Microeconomics is the study of the choices that individuals and businesses make and the way these choices interact and are influenced by governments.
"Wal-Mart Makes Electronics Push" is a microeconomic topic because it studies an issue that concerns one businesslong dash—Wal-Mart.
"VW, Porsche Take Break in Talks" is a microeconomic topic because it studies an issue that concerns the decisions of two businesses.
question
Label each entry in the list as dealing with a microeconomic topic or a macroeconomic topic.
1. Motor vehicle production in China is growing by 10% a year.
2. Coffee prices rocket.
3. Globalization has reduced African poverty.
4. The government must cut its budget deficit.
5. Apple sells 20 million iPhone 6 a month.
1. Motor vehicle production in China is growing by 10% a year.
2. Coffee prices rocket.
3. Globalization has reduced African poverty.
4. The government must cut its budget deficit.
5. Apple sells 20 million iPhone 6 a month.
answer
Microeconomics is the study of the choices that individuals and businesses make and the way these choices interact and are influenced by governments.
Macroeconomics is the study of the aggregate (or total) effects on the national economy and the global economy of the choices that individuals, businesses, and governments make.
"Motor vehicle production in China is growing by 10 percent a year" is a microeconomic topic.
"Coffee prices rocket" is a microeconomic topic.
"Globalization has reduced African poverty" is a macroeconomic topic.
"The government must cut its budget deficit" is a macroeconomic topic.
"Apple sells 20 million iPhone 6 a month" is a microeconomic topic.
Macroeconomics is the study of the aggregate (or total) effects on the national economy and the global economy of the choices that individuals, businesses, and governments make.
"Motor vehicle production in China is growing by 10 percent a year" is a microeconomic topic.
"Coffee prices rocket" is a microeconomic topic.
"Globalization has reduced African poverty" is a macroeconomic topic.
"The government must cut its budget deficit" is a macroeconomic topic.
"Apple sells 20 million iPhone 6 a month" is a microeconomic topic.
question
The following news items are either normative or positive statements.
1. Flat screen is better than traditional television.
2. Work hours are too long.
3. MP3 file sharing has decreased CD sales.
4. More police on inner-city streets will lower crime rate.
Which of the following statements are normative?
1. Flat screen is better than traditional television.
2. Work hours are too long.
3. MP3 file sharing has decreased CD sales.
4. More police on inner-city streets will lower crime rate.
Which of the following statements are normative?
answer
Both of the following statements are normative:
"Flat screen is better than traditional television" and
"Work hours are too long".
They express an opinion, but they don't assert a fact that can be checked.
"Flat screen is better than traditional television" and
"Work hours are too long".
They express an opinion, but they don't assert a fact that can be checked.
question
Label each of the entries in the last as a positive or a normative statement.
1. Low income people pay too much for housing.
2. The number of US farms has decreased over the past 50 years.
3. Toyota expands parts production in the US.
4. Imports from China are swamping US department stores.
5. The population of rural United States is declining.
1. Low income people pay too much for housing.
2. The number of US farms has decreased over the past 50 years.
3. Toyota expands parts production in the US.
4. Imports from China are swamping US department stores.
5. The population of rural United States is declining.
answer
Normative statements are statements about what ought to be.
Positive statements are statements about what is.
"Low-income people pay too much for housing" is a normative statement.
"The number of U.S. farms has decreased over the past 50 years" is a positive statement.
"Toyota expands parts production in the United States" is a positive statement.
"Imports from China are swamping U.S. department stores" is a normative statement.
"The population of rural United States is declining" is a positive statement.
Positive statements are statements about what is.
"Low-income people pay too much for housing" is a normative statement.
"The number of U.S. farms has decreased over the past 50 years" is a positive statement.
"Toyota expands parts production in the United States" is a positive statement.
"Imports from China are swamping U.S. department stores" is a normative statement.
"The population of rural United States is declining" is a positive statement.
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