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Chapter 1: Q5 (page 17)

Make (a) a positive economic statement of your choice and then (b) a normative economic statement relating to your first statement.

Short Answer

Expert verified

a) Positive economic statement: 'The unemployment rate has increased in the current financial year as compared to the previous year'.

b) Normative economic statement: "The government should introduce some investment-boosting policies to reduce the unemployment rates in the country".

Step by step solution

01

Meaning of positive and normative economic statements

When a statement is made on the basis of facts and theories, it is considered a positive statement. It accounts for actual relationships and data that are practically relevant to the economy.

On the other hand, a statement that is associated with providing opinions or conclusions is a normative statement. The statement generally includes value judgments, and it also involves suggestions.

02

Example of a positive economic statement

The statement, 'Unemployment rate has increased in the current financial year as compared to the previous year', focuses on the fact that prevails in a country pertaining to unemployment. Thus, it is an example of a positive economic statement because it shows a practical situation.

03

Example of a normative economic statement

The statement, 'The government should introduce some investment-boosting policies to reduce the unemployment rates in the country', suggests an action. Therefore, it is an example of a normative economic statement because it is reflected as a suggestion for the government to introduce some schemes to reduce unemployment.

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Most popular questions from this chapter

Explain the typical shapes of marginal benefit and marginal cost curves. How are these curves used to determine the optimal allocation of resources to a particular product? If current output is such that marginal cost exceeds marginal benefit, should more or fewer resources be allocated to this product? Explain.

Match each term with the correct definition.

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Pham can work as many or as few hours as she wants at the college bookstore for \(12 per hour. But due to her hectic schedule, she has just 15 hours per week that she can spend working at either the bookstore or other potential jobs. One potential job at a café will pay her \)15 per hour for up to 6 hours per week. She has another job offer at a garage that will pay her \(13 an hour for up to 5 hours per week. And she has a potential job at a daycare center that will pay her \)11.50 per hour for as many hours as she can work. If her goal is to maximize the amount of money she can make each week, how many hours will she work at the bookstore?

Suppose that you are given a \(100 budget at work that can be spent only on two items: staplers and pens. If staplers cost \)10 each and pens cost $2.50 each, then the opportunity cost of purchasing one stapler is

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