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1.1and1.2
100

What is the difference between objective and subjective?

  • Positive Statement: One that is based on facts which can be tested as true or false.
  • It is objective.
  • Normative Statement: One that is based on value judgments, which cannot be tested as true or false.
  • It is subjective.
200

Why is choice central to the economic problem?

A Different governments have different objectives.

B Firms have access to unlimited resources.

C Most resources have alternative uses.

D People's wants are limited.

C

300

The statements are from a report by a water company that supplies water to homes and businesses.

Which statement is normative?

A It is important that we continue to invest in our infrastructure.

B Our investment will have wider benefits, attracting visitors to the region.

C We are investing more than ever in the region.

D We use local suppliers on construction projects which boosts the local economy.

A

400

What is the difference between short run ,long run

and very long run?

  • Short run: at least one factor of production is fixed + technology is fixed
  • Long run: all factors of production are variable + technology is fixed
    Very long run: all factors of production are variable + technology is variable
500

A driver makes the following estimates in considering the purchase of a car which she intends to use only when she would otherwise have used public transport.

purchase price of car$6000

value of car after one year4500

car operating and repair costs, insurance and taxation for one year1800

cost of using public transport for one year instead of travelling by car800

potential earnings after tax on $6000 invested for one year500

What will be the opportunity cost in monetary terms to the driver over the year of travelling by car rather than by public transport?

A $1500

B $3000

C $3700

D $7800

B car 6000-4500=1500, 1500+1800+500= 3800

Public 800