Multiple Choice
In the context of positive and normative analysis, national powers and state powers are most likely to conflict with each other when:
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0. Basic Principles of Economics
Positive and Normative Analysis
Multiple Choice
When it spends money on education, a government is trying to:
A
conduct positive analysis by describing what is
B
achieve a normative objective by improving social welfare
C
increase the equilibrium price in the education market
D
reduce opportunity cost for private firms
Verified step by step guidance1
Step 1: Understand the difference between positive and normative analysis in economics. Positive analysis describes and explains economic phenomena as they are, focusing on facts and cause-effect relationships without judgment.
Step 2: Recognize that normative analysis involves value judgments about what ought to be done, often aiming to improve social outcomes or welfare.
Step 3: Analyze the government's spending on education. Since this action is intended to improve social welfare (a value judgment about what is desirable), it aligns with normative objectives rather than just describing facts.
Step 4: Consider the other options: increasing equilibrium price or reducing opportunity cost for private firms are specific market effects or cost considerations, but they do not capture the broader goal of improving social welfare.
Step 5: Conclude that government spending on education is best understood as an attempt to achieve a normative objective by improving social welfare.
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