Multiple Choice
To ensure that his plans are moving his company in the right direction, Joaquin can apply a:
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0. Basic Principles of Economics
Positive and Normative Analysis
Multiple Choice
Which of the following is a positive statement?
A
The government should increase the minimum wage to help low-income workers.
B
It is unfair that some people earn less than others.
C
Society ought to provide free healthcare for everyone.
D
An increase in the minimum wage will lead to higher unemployment among teenagers.
Verified step by step guidance1
Understand the difference between positive and normative statements: Positive statements describe the world as it is and can be tested or validated with evidence, while normative statements express opinions or what ought to be and are subjective.
Review each statement and classify it: For example, "The government should increase the minimum wage to help low-income workers" is normative because it uses the word "should" indicating a value judgment.
Identify statements that express opinions or fairness, such as "It is unfair that some people earn less than others" and "Society ought to provide free healthcare for everyone," which are normative because they reflect personal or societal values.
Focus on the statement "An increase in the minimum wage will lead to higher unemployment among teenagers," which makes a testable claim about cause and effect and does not express an opinion, making it a positive statement.
Conclude that the positive statement is the one that can be empirically tested or verified, distinguishing it clearly from normative statements that involve subjective judgments.
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