Multiple Choice
Suppose that for a particular business there are no implicit costs. Then, which of the following statements is true?
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0. Basic Principles of Economics
Positive and Normative Analysis
Multiple Choice
Which of the following scenarios would be considered a positive economic statement?
A
The unemployment rate decreased by 2% last quarter.
B
The government should reduce taxes to boost economic growth.
C
Society ought to provide free healthcare for all citizens.
D
It is unfair that some people earn more than others.
Verified step by step guidance1
Understand the difference between positive and normative economic statements. Positive statements describe facts or cause-and-effect relationships and can be tested or validated. Normative statements express opinions or what ought to be and cannot be tested.
Review each statement to determine if it is testable and factual (positive) or opinion-based and prescriptive (normative).
Analyze the statement 'The unemployment rate decreased by 2% last quarter.' This is a factual claim that can be verified with data, so it is a positive economic statement.
Examine the other statements: 'The government should reduce taxes to boost economic growth,' 'Society ought to provide free healthcare for all citizens,' and 'It is unfair that some people earn more than others.' These express opinions or value judgments, making them normative statements.
Conclude that the scenario describing the unemployment rate decrease is the positive economic statement because it is objective and testable.
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