A Newspaper Editorial Explaining What Should Be Done to Reduce

question 84

Multiple Choice

A newspaper editorial explaining what should be done to reduce the budget deficit is an example of

• A)everything else held constant.
• B)microeconomics.
• C)functional economics.
• D)positive economics.
• E)normative economics.

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Definitions:

Monopolist's Demand Curve

The demand curve faced by a monopolist, which is the same as the market demand curve, indicating that the monopolist can set the price only by choosing the quantity to produce.

Elastic

Describes a situation in which the demand or supply for a product changes significantly when its price changes.

Barriers

Obstacles that prevent or hinder entry into a market or the pursuit of certain activities, which can be economic, legal, technical, or natural in nature.

Allocative Efficiency

A state of the economy in which production represents consumer preferences; every good or service is produced up to the point where the last unit provides a benefit to consumers equal to the cost of producing it.