Multiple Choice
Which type of economic analysis is represented by the question: 'How will new technology laws impact the business?'
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0. Basic Principles of Economics
Positive and Normative Analysis
Multiple Choice
Which of the following statements exemplifies positive economics?
A
Society ought to provide free healthcare for all citizens.
B
The government should increase the minimum wage to improve living standards.
C
It is unfair that some people earn less than others.
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 economics: Positive economics deals with objective, testable statements about how the economy works, while normative economics involves subjective opinions about what ought to be done.
Identify the nature of each statement: Check if the statement can be tested or verified with data (positive) or if it expresses a value judgment or opinion (normative).
Analyze the given statements: For example, "Society ought to provide free healthcare for all citizens" is normative because it expresses what should happen, not what is.
Focus on the statement "An increase in the minimum wage will lead to higher unemployment among teenagers": This is a positive economic statement because it makes a testable prediction about the effect of a policy change.
Conclude that the correct answer exemplifies positive economics because it is an objective claim that can be supported or refuted with empirical evidence.
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