Which type of economic analysis is represented by the question: 'How will new technology laws impact the business?'

• A. Normative analysis
• B. Positive analysis
• C. Prescriptive analysis
• D. Descriptive analysis

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the difference between positive and normative economic analysis. Positive analysis deals with objective, fact-based questions about 'what is' or 'what will be,' while normative analysis involves subjective judgments about 'what ought to be.'
2. Step 2: Identify the nature of the question: 'How will new technology laws impact the business?' This question seeks to predict or explain the effects of a policy, which is a factual inquiry.
3. Step 3: Recognize that since the question asks about the impact (a cause-and-effect relationship) without expressing any value judgment or opinion, it falls under positive analysis.
4. Step 4: Note that prescriptive analysis involves recommendations or advice on what should be done, which is not the case here, and descriptive analysis typically involves describing current or past states without predicting effects.
5. Step 5: Conclude that the question represents positive economic analysis because it focuses on understanding the consequences of a policy change based on evidence and facts.