Which of the following are positive economic statements and which are normative economic statements?
a. An increase in the price of gasoline will decrease the quantity of gasoline purchased.
b. The government should eliminate the minimum wage.
c. All states should raise the minimum wage to at least $10 per hour.
d. The government should scrap its current income tax structure in favor of a flat tax.
e. Unemployment has increased since the onset of the recession.
f. The government should not bail out investment banks during a financial crisis.
What will be an ideal response?
Statements a and e are positive economic statements. Statements b, c, d, and f are normative economic statements.
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People who buy futures on the commodity market are
A) increasing, not reducing, their personal risk. B) reducing, not increasing, their personal risk. C) either reducing or increasing their personal risk, depending on the circumstances. D) creating added risk for others in society. E) showing they are essentially indifferent to risk.
Should economics be considered a science? Why or why not?
What will be an ideal response?
Choose the letter below that best represents the type of shift that would occur in the following situation in the United States: A technological breakthrough significantly reduces the cost of computerizing production lines. (See Figure 8.6.)
A. A. B. B. C. C. D. D.
Firms that sell information products experience relatively high fixed costs but, once they have produced the first unit, can
A) sell additional units at a loss, or above cost. B) provide expensive information products to consumers. C) sell additional units at a relatively low cost per unit. D) experience short-run diseconomies of scale.