Which of the following statements best illustrates a normative analysis regarding the decision to take a job with a high salary and few benefits?

• A. On average, jobs with higher salaries and fewer benefits are found in certain industries.
• B. A job with a high salary and few benefits typically attracts workers who value income over benefits.
• C. The proportion of workers accepting jobs with high salaries and few benefits has increased over the past decade.
• D. The government should require employers to offer more comprehensive benefits to improve worker welfare.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the difference between positive and normative analysis. Positive analysis describes and explains economic phenomena based on facts and cause-effect relationships, without judgment. Normative analysis involves value judgments about what ought to be and includes opinions or recommendations.
2. Step 2: Review each statement and classify it as positive or normative. Statements that describe what is or what has happened are positive. Statements that suggest what should be done or express opinions are normative.
3. Step 3: Identify that the first three statements describe facts or observed trends about jobs, salaries, benefits, and worker preferences, which are examples of positive analysis.
4. Step 4: Recognize that the last statement, "The government should require employers to offer more comprehensive benefits to improve worker welfare," expresses a recommendation and a value judgment, making it a normative statement.
5. Step 5: Conclude that the statement best illustrating normative analysis is the one that prescribes a policy action or expresses an opinion about what ought to be done.