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Chapter 1: Q 14 (page 16)

Based on your answer to Problems 1–12, categorize each of the following conclusions as being the result of positive analysis or normative analysis.

(a) A higher minimum wage will reduce employment opportunities for minimum wage workers.

(b) Increasing the earnings of minimum wage employees is desirable, and raising the minimum wage is the best way to accomplish this.

(c) Everyone should enjoy open access to health care at no explicit charge.

(d) Heath care subsidies will increase the consumption of health care.

Short Answer

Expert verified

(a) Positive Analysis

(b) Normative Analysis

(c) Normative Analysis

(d) Positive Analysis

Step by step solution

01

Step 1. Positive and Normative Analysis.

Positive analysis refers to descriptive facts and statements whereas Normative analysis is based on the judgments of economic policies.

02

Step 2. Categorize.

(a) This is a positive analysis since it is descriptive and does not require any judgment.

(b) This is a normative analysis because it involves the judgment of how can earnings be increased.

(c) This is a normative analysis as it contains the condition that everyone should enjoy open access to no explicit costs.

(d) This is a positive analysis since the condition is purely descriptive on the increasing healthcare subsidies.

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Most popular questions from this chapter

How will the long-run adjustment of Egyptian cotton supply from the elimination of the subsidy likely affect the number of suppliers - that is, Egyptian cotton farmers? Explain.

Sebastian is a financial analyst who is convinced that his clients do not always make choices that are consistent with their long-term objectives. He has also determined that his clients do not consider every relevant choice and often fail to act in their own self-interest. Does Sebastian perceive that his clients' behavior accords with the rationality assumption or the assumption of bounded rationality?

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