A government subsidy paid to a firm i. increases the demand for the good. ii. has no effect on the supply of the good. iii. leads to an increase in the equilibrium quantity.
A) i only
B) i and ii
C) ii only
D) iii only
E) i and iii
Question 2
Positive and normative statements differ in that
A) positive statements can be tested, whereas normative statements cannot.
B) normative statements can be tested, whereas positive statements cannot.
C) normative statements depict what is and positive statements depict what ought to be.
D) normative statements never use the word should.
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