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26 Nov 2019

What is the difference between normative and positive statements?

a.Positive statements involve subjective value judgments; normative statements try to be objective.

b.Normative statements are concerned with what is; positive statements are all about what the goals of the economy should be. c.Positive statements originate from classical economics; normative statements are rooted in Keynesian economics.

d.Positive statements are all about what is; normative statements are concerned with what the goals of the economy should be.

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Keith Leannon
Keith LeannonLv2
5 Feb 2019
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Related textbook solutions

Principles of Economics
2nd Edition, 2017
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Related questions

When demand for a good is very elastic, revenue ________ when the price falls.

(2)

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(3)

An elasticity measure greater than one means that demand is __________.

(4)

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having made all other necessary changes.

holding constant all other variables.

assuming all households have similar incomes.

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(5)

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(7)

What is the difference between normative and positive economics?

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Positive economics studies the actions of individuals; normative economics studies the actions of households.

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(8)

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the quantity of a good demanded decreases as the price declines.

(9)

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(10)

What is the effect on demand for bread when the price of bagels, a substitute for bread, rises?

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the price of the good increases.

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(14)

How do expectations of prices affect how much of a good producers are willing to sell?

Expectations of prices affect only demand, not supply.

Actual prices, not expectations of prices, affect supply.

If producers expect prices to fall in the future, they supply less at every price.

If producers expect prices to rise in the future, they supply less at every price.

(15)

When the price of a good is above equilibrium level,

the quantity demanded exceeds the quantity supplied.

the quantity supplied exceeds the quantity demanded.

the supply curve shifts to the left.

the supply curve shifts to the right.

(16)

At a price of P0 in the diagram below, which of the following statements is true?

Supply equals demand.

There is excess demand.

There is excess supply.

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(17)

If demand for bread increases at every price, the equilibrium price of bread will

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rise.

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(18)

If the demand for bread declines, then

at the original equilibrium price, there is excess demand.

at the original equilibrium price, there is excess supply.

the supply curve shifts to the right.

the supply curve shifts to the left.

(19)

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rises; rises

falls; rises

falls; falls

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always a negative number.

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(21)

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(22)

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(25)

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A) An decrease in the price of golf balls.

B) An increase in the price of golf clubs.

C) A decrease in the cost of producing golf balls.

D) An increase in average household income when golf balls are a normal good.

E) none of the above

Q3. If input prices increase, all else equal, --------------------------------

Q4. Which of the following would decrease the supply of wheat?

A) A decrease in the price of pesticides. B) An increase in the demand for wheat. C) A rise in the price of wheat. D) An increase in the price of corn. E) none of the above

Q5. When Sonoma Vineyards increases the price of its Chardonnay from $15 per bottle to $20 per bottle, the result is a decrease in…

A) the quantity of this wine demanded B) the quantity of this wine supplied.

C) the demand for this wine. D) the supply of this wine.

Q6. Which of the following will cause a change in quantity supplied?

A) Technological change. B) A change in input prices. C) A change in the market price of the good.

D) A change in the number of firms in the market. E) all of the above.

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A) Demand decreases and supply decreases. B) Demand remains constant and supply increases.

C) Demand decreases and supply increases. D) Demand increases and supply increases. E) none of the above.

Use the following demand and supply functions to answer the next three questions.

Demand: QD= 600 - 30P Supply: QS = -300 + 120P

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A) P = $2 and Q = 540. B) P = $10 and Q = 300. C) P = $6 and Q = 420.

D) P = $3.33 and Q = 500. E) none of the above

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D) shortage of 660 units. E) none of the above

Q10. If the price is currently $4, there is a

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Q.11 The Free Indeed Company manufactures ladies’ shoes that are sold through discount houses. The shoes are sold for $20 each pair; the fixed costs are $110,000 for up to 30,000 pairs of shoes; variable costs are $13 per pair of shoes. What is the firm’s breakeven point in units sold?

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d) the pound will fall in value against the dollar

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a. Macroeconomics b. Positive economics c. Normative economics d. Microeconomics

Q14. Which of the following statements is normative in nature?

A) That economics mid-term was tough!

B) Professor of economics put too many multiple-choice questions.

C) Neither of these statements is normative in nature

D) Both A & B of these statements are normative in nature

18. [Related to the Making Connection] The Making the Connection explains that there are both positive and normative elements to the debate over whether medical schools should charge tuition and whether hospitals should continue to pay residents who pursue primart care but not residents who specialize

Which of the following economic statistsics would be the most useful in evaluating the positive elements in this debate?

A. Poverty rates by geographic region.

B. Medical school tuition rates, applications, and enrollments.

C. Age distribution characterists of the population by geographic region

D. Physician incomes by specialty and geographic region.

E. All of the Above

Assuming that these statistics are available or could be gathered, are they likely to resolve the normative issues in this debate?

A. Yes, the quantative analysis of hard economic data leaves no unsettled questions. Subjective considerations cannot override objective analysis.

B. No, because normative issues involve value judgements that incorporate an individuals full range of experiences, beliefs, and emotions.

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Which of the following, if true, explains why consumers did not increase consumption in spite of falling prices?

A. Most people were expecting prices to decline further.

B. The rate of unemployment in thise country is lower that most other developing countries.

C. The interest rate offered on bank deposits is low.

D. The government lowered taxes on corporate profits earlier this year.

E. The government recently accounced plans to withdraw subsidies on petroleum products.

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