[MAX]10[/MAX] [QUESTIONS] Justify the following statements, using well labeled diagram and/or mathematical exposition where necessary. 1. The analysis of the fairness of a tax policy is related to positive economics. 2. Minimum price legislation is only effective when the price is set below equilibrium price. 3. The United States is an example of countries which operate a socialist economic system as against the capitalist economic system 4. An individual demand curve takes into account all factors which affect demand 5. A Cobb – Douglas production function describes constant returns to scale. 6. For a negative slope linear demand function, marginal revenue (MR) and average revenue (AR, i.e. price) are equal at every point. 7. The perfectly competitive firm will shut down in the short run if its price is less than average total cost. 8. The value of price elasticity varies over range of a linear demand curve. 9. The marginal product (MP) is rising when the total product is ...
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