Which Statement Is an Example of Positive Economics

question 144

Multiple Choice

Which statement is an example of positive economics?

• A) A free market in kidneys would end the shortage of kidneys.
• B) People should not sell organs for profit.
• C) The United States should not trade with countries with human rights abuses.
• D) All three of these statements are examples of positive economics.

Recognize the impact of substitutes' price changes on supply decisions.

Discern the influence of production costs on supply.

Define the law of supply and its implications.

Understand the concept of demand and factors that affect it.

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Definitions:

Variable Costing

A costing method that includes only variable production costs (direct materials, direct labor, and variable overhead) in product costs, excluding fixed overhead.

Absorption Costing

A method of product costing that incorporates all manufacturing costs, including both fixed and variable costs, in the price of a product.

Variable Costing

An accounting method that charges only variable costs to cost of goods sold and reports fixed costs separately as period costs.

Fixed Manufacturing Overhead

Costs associated with production that do not vary with the level of output, such as salaries of managers and rent for factory buildings.