Which of the Following Is True

question 16

Multiple Choice

Which of the following is true?

• A) Positive economics deals with how people react to changes in benefits, and normative economics deals with how people react to changes in costs.
• B) Positive economic statements are testable, but normative statements are not.
• C) Positive economic statements involve value judgments while normative economics focuses on whether a policy will achieve its intended objectives.
• D) Positive economic statements focus on policy issues while normative economics focuses on economic theory.

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials, labor, and overhead expenses.

Cost of Goods Manufactured

The total cost of all materials, labor, and manufacturing overhead used in producing finished goods over a specific period.

Flexible Budgeting

A budgeting process that adjusts for changes in the volume of activity, rather than remaining static.

Direct Labor

The wages and related benefits of employees who are directly involved in the production of goods or the delivery of services.