Question

4.   For which of the following decisions would marginal analysis be most relevant?
A)   Should I go to college or work after graduating from high school?
B)   Should I eat another doughnut?
C)   Should I use $20,000 as a down payment on a house or buy a car?
D)   Should I get married?

5.   Economists tend to believe that to change people's behavior you must:
A)   appeal to their concern for society.
B)   change their incentives.
C)   legislate the change.
D)   appeal to their religious values.

8.   An increase in efficiency means that an economy has:
A)   reduced its opportunity costs.
B)   increased the equity of its distribution of goods and services.
C)   made some people better off without making others worse off.
D)   increased the incentives for its citizens to follow their own self-interest.

13.   Which of the following is a normative statement?
A)   Women's labor force participation rate has increased during the past 100 years.
B)   The federal minimum wage is higher today than it was in 1990.
C)   Children in the United States are required to go to school until they reach a certain age.
D)   The best way to encourage growth in the economy is through government spending.

Answer 1

4. Option B. As marginal analysis would tell about the additional benefits derived by getting an additional good

5. Option B. Incentives can be monetary or non-monetary, changes in incentives causes people to change their way in a predictable way

8. Option C. being efficient means the productivity increases which increases the living conditions

13. Option D. Normative statements express value judgement whether a situation is desirable or undesirable