Which of the Following Is an Example of a Positive

question 101

Multiple Choice

Which of the following is an example of a positive economic statement?  

• A) Workers with families should be paid at least the minimum wage. 
• B) If crime rates were reduced, the world would be a better place in which to live. 
• C) Marginal tax rates should be reduced for individuals in the highest tax brackets. 
• D) An increase in the price of gasoline will cause a reduction in the amount purchased.

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Definitions:

Anchoring Effect

A cognitive bias where an individual relies too heavily on an initial piece of information (the "anchor") when making decisions.

Hedonic Treadmill

A theory suggesting that people continually seek new levels of stimulation or material goods to maintain happiness, but generally return to a stable level of happiness despite major positive or negative changes.

Prospect Theory

Prospect theory is a behavioral economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known.

Neoclassical Economics

An economic theory that focuses on how consumer demand and production costs influence price, output, and income distribution in markets.