Question

Question 11 pts

What is the difference between positive economics and normative economics?

Group of answer choices

Positive economics deals with dynamic systems, while normative economics focuses on static systems.

Normative economics deals with how the world actually works, whereas positive economics focuses on what people ought to do.

Positive economics requires making value judgments, while normative economics relies solely on factual statements.

Normative economics applies in cases that are characterized by typical or normal behaviors and dynamics, while positive economics applies in cases with unusually rapid technological progress.

Normative economics focuses on what people ought to do, whereas positive economics deals with how the world actually works.

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Question 21 pts

Which of the following are true statements about public goods?

Group of answer choices

To find the aggregate marginal willingness to pay (MWTP) for the good you would add together the individual MWTP corresponding to given ``output'' levels

The good is available in the same quantities to everyone

Payment of a fee to a public agency provides access to the good

The total amount consumed is the sum of the amounts consumed by each individual

Public goods are those paid for by taxes and provided and maintained by the government

Overuse by some diminishes the amount available to others

They are rival and non-excludable

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Question 31 pts

Angela is willing to pay $75 now for an item to be delivered in exactly 3 years time. The most she would be willing to pay for the item today is $100. What is Angela's discount rate?

Group of answer choices

7.5% per year

25% per year

15% per year

10% per year

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Question 41 pts

Aubrey consumes 5 units of a certain good. Aubrey would buy one additional unit only if the price per unit were $10 or less. What concept is being illustrated here?

Group of answer choices

Diminishing marginal utility

Marginal willingness to pay

Discounting

Aggregate willingness to pay

Intrinsic value

Answer 1

11. Ans - Normative economics focuses on what people ought to do, whereas positive economics deals with how the world actually works

21. Ans - They are rival and non-excludable

31. Ans is 10%

discount rate = (Future value / present value )^1/n - 1

Discount rate = (100/75)^1/3 - 1

= 1.10064 - 1

= 0.10064

= 10.064% = 10%

41. Ans - Marginal willingness to pay

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