2. Explain For the sake of argument (and this assignment) assume that global war

Question

2. Explain For the sake of argument (and this assignment) assume that global warming is a fact, caused by human activity, and that it can be fixed by taxing producers for the amount of carbon they release. The problem is that this tax would greatly increase costs for everyone. Using this scenario please answer the following questions: How would this situation be described in terms of Positive economics? How would this situation be described in terms of Normative economics? Which of these do you think is the correct what to describe this situation? Answer each of these 3 questions with at least 2 well developed paragraphs. Please be sure to validate your opinions and ideas with citations and references in APA format – if applicable. Create your work into a Microsoft Word document and submit it through the assignments tab.

Explanation / Answer

Positive economics is the study of what and why an economy operates as it does. It is also known as Descriptive economics and is based on facts which can be subjected to scientific analysis in order for them to be accepted.

It is based on factual information and uses statistical data, and scientific formula in determining how an economy should be. It deals with the relationship between cause and effect and can be tested.

Normative economics is the study of how the economy should be. It is also known as Policy economics wherein normative statements like opinions and judgments are used. It determines the ideal economy by discussion of ideas and judgments.

In normative economics, people state their opinions and judgments without considering the facts. They make distinctions between good and bad policies and the right and wrong courses of action by using their judgments.

In terms of positive economics formulas and specific facts would be used to determine how much each producer of carbon distributing to global warming should be taxed and this this be determined by the amount of emissions.

With regard to normative economics people would discuss by giving their opinions and judgements on what it should be done on the basis of taxation on the amount of emissions leading to global warming.

In this case positive economics is the ideal and the correct way to describe this because it uses statistical data and facts to solve this issues of global warming. It would be a fair because it deals with relationship of cause and effect of carbon emissions and can be tested.

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