Explain the difference between positive economics and normative economics
What will be an ideal response?
Positive economics seeks to understand behavior and the operation of systems without making judgments. It describes what exists and how it works. Normative economics analyzes outcomes of economic behavior, evaluates them as good or bad, and may prescribe courses of action.
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Which of the following is a justification for taxes?
a. the ability-to-pay principle b. the progressive tax principle c. the proportional tax principle d. the regressive tax principle e. the desire of the government to spend more funds
Refer to the accompanying figure. Suppose the solid line shows the current demand for coffee. In response to a news story explaining that coffee causes heart disease, you should expect:
A. neither a change in quantity demanded nor a shift in demand. B. the demand curve to shift to D(B) in anticipation of higher future prices. C. the demand curve to shift to D(A) because some people will stop drinking coffee. D. the quantity of coffee demanded to decrease, but no shift in the demand curve.
Suppose that only 2 percent of all people are geniuses. If an IQ test indicates that Albert is a genius, but the test is only accurate 90 percent of the time, then the probability that Albert really is a genius is roughly:
A. 18 percent. B. 16 percent C. 10 percent. D. 2 percent.
In recent years, the Bank of Canada has
What will be an ideal response?