Question

Which of the following is a normative economic statement? With falling home prices and rising mortgage interest rates, the amount of foreclosures has increased. B) The federal government is considering raising the gasoline tax to promote the use of public transportation. c) Fashion designers should be allowed to copyright designs to promote innovation. D) Rising global demand for diesel and heating oil has led to increases in the price of crude oil. Question 15 (10 points) The economic analysis of minimum wage involves both normative and positive analysis. Consider the following consequences of a minimum wage: a. The minimum wage law causes unemployment. b. Unemployment would be lower without a minimum wage law. c. Minimum wage laws benefit some workers and harm others. d. The minimum wage should be more than $7.25 per hour. Which of the consequences above are positive statements and which are normative statements? A) Only a is a positive statement, b, c, and d are normative statements. OB) a, b, and care positive statements and d is a normative statement. O C ) a and c are positive statements, b and d are normative statements. O D ) a and b are positive statements, c and d are normative statement

Answer 1

Positive statements are objective and fact based, while normative statements are

subjective and value based. Positive statements can be proved or disproved.

Normative statements are opinion-based and cannot be proved or disproved.

a. is positive statement as it can be tested.

b. is normative as it is an opinion and cannot be proved.

c.is positive as it can be tested.

d. Normative as it can be tested.

a and c are positive, b and d are normative.

Choice C is the answer.