Question

11. Are the following statements true or false? Explain your answers. a. "When people must pay higher taxes on their wage earnings, it reduces their incentive to work” is a positive statement. b. "We should lower taxes to encourage more work” is a positive statement. c. Economics cannot always be used to completely decide what society ought to do. d. “The system of public education in this country generates greater benefits to society than the cost of running the system” is a normative statement. e. All disagreements among economists are generated by the media.

Answer 1

a	TRUE. A positive statement is something that can be VERIFIED with data. Numerous attempts have been made to test this statement.
b	FALSE. A positive statement is something that can be VERIFIED with data. This statement is NOT based on any data. It is just telling what to do. Such a statement that contains a value cannot be tested with data.
c	TRUE. Economic models are NOT opinion, they are application based. This means they might be correctly applicable in one situation but may not be in another situation. They are not intended to be used for what is OUGHT to be done.
d	FALSE. This statement can be verified with data. It is a POSITIVE statement not a NORMATIVE statement.
e	FALSE. Not all disagreements among economists are generated by media. There are personal disagreements based on differentiating beliefs that exist in reality. Economists can disagree based on their personal preferences,