Which Statement Is an Example of Normative Economics

question 73

Multiple Choice

Which statement is an example of normative economics?

• A) Tariffs increase deadweight loss.
• B) Trade increases economic efficiency.
• C) Tariffs should be lower.
• D) Wealth-maximizing countries focus on producing their comparative advantage.

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Definitions:

Fixed Costs

Expenses that do not change in proportion to the activity of a business, such as rent or salaries.

Break-Even Point

The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.

Cost-Volume-Profit Chart

A graphical representation that shows the relationship between a company's cost, production volume, and profits.

Variable Costs

Charges that adjust based on the volume of sales or production levels.