Which of the Following Is a Normative Statement

question 145

Multiple Choice

Which of the following is a normative statement?

• A) Studying more hours leads to an increase in your GPA.
• B) An increase in tax rates means people work fewer hours.
• C) Taking extra vitamin C prevents catching a cold.
• D) States should require all motorcycle riders to wear helmets to reduce the number of riders killed.

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Definitions:

Natural-Monopoly Situation

A market condition in which a single firm can produce output at a lower cost than can multiple firms, leading to a monopoly justified by efficiencies of scale.

Implicit Costs

The opportunity costs that arise from using resources that a business already owns rather than earning revenue from those resources elsewhere.

Explicit Costs

Direct, out-of-pocket expenses incurred in conducting a business activity, such as wages, rent, and materials.

Economic Profits

Profits earned by a company after accounting for both explicit (direct) and implicit (opportunity) costs.