It has been noted that when the price of a good increases, people purchase less of the good. This is an example of
A) macroeconomic analysis.
B) irrational behavior.
C) normative economic analysis.
D) positive economic analysis.

Question

Quizplus · Accepted Answer

This is an example of positive economic analysis, which is concerned with describing and explaining how markets and economies function. It is a well-established economic principle that as the price of a good increases, the quantity demanded of that good will decrease, ceteris paribus. This principle is based on the law of demand, which states that people will buy less of a good if its price increases, all else being equal.

It Has Been Noted That When the Price of a Good