Which One of the Following Is an Example of a Normative

question 305

Multiple Choice

Which one of the following is an example of a normative statement?

• A) A vacation in Colorado is better than a vacation in Hawaii.
• B) Hotels in Colorado are more expensive than are hotels in Hawaii.
• C) The hotel vacancy rate in Hawaii will increase as airfares to Hawaii increase.
• D) The busiest tourist month in Colorado is July.

Illustrate how changes in technology and product demand affect the labor market.

Recognize the effects of input prices on the production costs and decision-making of firms.

Explain the concept of derived demand in the context of labor and capital markets.

Interpret the marginal revenue product (MRP) and its role in resource employment decisions.

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Definitions:

Shutdown Decision

A short-run economic decision made by firms about whether to continue operations or shut down temporarily based on costs and revenue.

Marginal Cost Curve

A graphical representation showing the change in the total cost of producing one additional unit of a product or service.

Average Variable Cost

The total variable costs divided by the quantity of output produced, representing the variable cost of producing each unit of output.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced, showing the average cost per unit.