Multiple Choice
Which of the following statements best illustrates a positive economic analysis regarding the capabilities of a firm?
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0. Basic Principles of Economics
Positive and Normative Analysis
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Which of the following best describes a positive statement in economics?
A
A statement that prescribes policy recommendations.
B
A statement that can be tested and validated using evidence.
C
A statement based on personal opinions and beliefs.
D
A statement expressing a value judgment about what ought to be.
Verified step by step guidance1
Understand the difference between positive and normative statements in economics. Positive statements describe the world as it is and can be tested or validated with evidence.
Recognize that normative statements express opinions or value judgments about what ought to be and cannot be tested or proven true or false.
Identify that a statement prescribing policy recommendations is normative because it suggests what should be done, not what is.
Note that statements based on personal opinions and beliefs are subjective and normative, not positive.
Conclude that the best description of a positive statement is one that can be tested and validated using evidence.
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