Which of the Following Is an Example of a Normative

question 21

Multiple Choice

Which of the following is an example of a normative statement?

• A) Car prices should be affordable.
• B) Fewer people die in larger cars than in smaller cars.
• C) If wages increase, firms will fire some workers.
• D) If cars become more expensive, fewer people will buy them.
• E) Cars emit pollution.

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Definitions:

Allocation of Limited Resources

The process of distributing scarce resources among various projects or business units.

Incremental Costs

The additional costs incurred when producing an additional unit of a product or service.

Fixed Manufacturing Costs

Costs that do not change with the level of production, such as rent, salaries, and insurance, which are incurred regardless of output volume.

Full Capacity

The maximum level of output that a company can sustain to make a product or provide a service.