Micro-Quiz #1

Normative Economics

Economic Statements that involve judgements -Ex The government should raise the minmum wage

Positive economics

Economic statements that are factual- Example: The government will raise the minimum wage

Four economic resources

Land, Labor, Capital and entrepreneurial abiliy

Questions related to the market system

what to produce, how to produce, who obtains the output, how to adjust to change, and how to promote technological progress

Substitue good example and definition

Coffee and tea- a product that can be easily replaced by another similar one

Complimentary good example

Car and gas

Luxury good example

Designer purse

Normal good example

Appliances- product that exhibits a direct relationship between demand and income

Inferior good example

great value groceries

Price floor definiation and example

The legal minmum price of somthing a example is rent

Price ceiling example

A legalw requirement of a price not going over a certain level