In Economics, Normative Statements Are About

question 242

Multiple Choice

In economics, normative statements are about

• A) the way things ought to be.
• B) the way things are.
• C) marginal benefits, not marginal costs.
• D) marginal costs, not marginal benefits.

Identify conditions for profit maximization in a perfectly competitive market.

Distinguish between explicit and implicit costs.

Analyze the impact of market price on a firm's economic decisions within perfect competition.

Understand the concept of opportunity costs in the context of economic profits.

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Definitions:

Assets

Resources owned by a company that have economic value and can be converted into cash or are expected to generate income.

Advertising

The activity or profession of producing commercials, billboards, and other promotional materials to promote products or services.

Operating Expenses

Costs incurred during the normal functioning of a business, excluding pricing of goods sold.

Net Income

Net Income is the total profit of a company after all expenses, including taxes and operating costs, have been deducted from revenues.