Determine whether the following statements are based on positive or normative an

Question

Determine whether the following statements are based on positive or normative analysis. Be sure to explain your answers.

(8 points) Prices of physician services should be controlled by the government because many citizens cannot afford to pay for a visit to a physician.

Positive

(8 points) According to Tosteson et al (1990), a 25 percent drop in the number of people who smoked in 1990 would reduce the incidence of coronary heart diseases by 0.7 percent by the year 2015.

Positive

(8 points) Rising health care costs have forced numerous rural hospitals to close their doors in recent years.

(16 points) According to government statistics, in 1989, 7.2 deaths per 100,000 residents were alcohol induced. To decrease this number, the government should impose higher taxes on alcohol.
Normative

Explanation / Answer

a. Normative analysis. This is because this statement is based on value judgement and not on facts and figures.

b. Positive economics. This is a statement given by an economist and no value judgement is involved.

c. Positive economics. The statement has no value judgement and not opinion based.

d. Normative. The second half is opinion based and involves value judgement and thus it is normative economics.

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