When it spends money on education, a government is trying to:

• A. conduct positive analysis by describing what is
• B. achieve a normative objective by improving social welfare
• C. increase the equilibrium price in the education market
• D. reduce opportunity cost for private firms

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the difference between positive and normative analysis in economics. Positive analysis describes and explains economic phenomena as they are, focusing on facts and cause-effect relationships without judgment.
2. Step 2: Recognize that normative analysis involves value judgments about what ought to be done, often aiming to improve social outcomes or welfare.
3. Step 3: Analyze the government's spending on education. Since this action is intended to improve social welfare (a value judgment about what is desirable), it aligns with normative objectives rather than just describing facts.
4. Step 4: Consider the other options: increasing equilibrium price or reducing opportunity cost for private firms are specific market effects or cost considerations, but they do not capture the broader goal of improving social welfare.
5. Step 5: Conclude that government spending on education is best understood as an attempt to achieve a normative objective by improving social welfare.