Multiple Choice
With which of the following statements would most economists agree regarding the distinction between positive and normative analysis?
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0. Basic Principles of Economics
Positive and Normative Analysis
Multiple Choice
Which of the following best describes a difference between positive analysis and normative analysis in economics?
A
Positive analysis is concerned with ethical considerations, while normative analysis ignores ethics.
B
Positive analysis focuses on objective facts and cause-effect relationships, while normative analysis involves value judgments about what ought to be.
C
Normative analysis uses statistical methods, while positive analysis relies on opinions.
D
Positive analysis is only used in macroeconomics, while normative analysis is used in microeconomics.
Verified step by step guidance1
Step 1: Understand the definitions of positive and normative analysis in economics. Positive analysis deals with objective statements that can be tested or validated, focusing on facts and cause-effect relationships.
Step 2: Recognize that normative analysis involves subjective statements that include value judgments about what ought to be, reflecting opinions or ethical considerations.
Step 3: Compare the options given by identifying which one correctly contrasts the objective nature of positive analysis with the value-laden nature of normative analysis.
Step 4: Eliminate options that incorrectly describe the use of ethics, statistical methods, or the scope of macroeconomics versus microeconomics, as these do not accurately capture the fundamental difference.
Step 5: Conclude that the best description is the one stating that positive analysis focuses on objective facts and cause-effect relationships, while normative analysis involves value judgments about what ought to be.
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