A Statement Describing How the World Should Be

question 26

Multiple Choice

A statement describing how the world should be

• A)is a normative statement.
• B)is a positive statement.
• C)would only be made by an economist speaking as a scientist.
• D)would only be made by an economist employed by the government.

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Definitions:

Monopoly

A market structure characterized by a single seller, selling a unique product in the market with no close substitutes and high barriers to entry.

Deregulate

The process of removing or reducing government regulations from an industry or business, often to foster more competition and innovation.

Legal Cartel Theory

A theory that proposes legal frameworks and regulations can sometimes create environments that encourage the formation of cartels, or cooperate between firms to control prices and output like a monopoly.

Public Interest Theory

The theory that regulation seeks to protect the public at large from inefficiencies and inequities that occur because of certain market practices.