4) Which of the following is a normative economic statement? A) Rising global de

Question

4) Which of the following is a normative economic statement? A) Rising global demand for coal has led to increases in the price of coal. B) With rising mortgage rates and rising unemployment rates, the number of unsold homes has increased C) The state of Texas is considering increasing funds for light-rail development to promote the use of ublic transportation. D) Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable 5. Which of the following statements about positive economic analysis is false? A) Positive analysis uses an economic model to estimate the costs and benefits of different course of actions B) There is much more disagreement among economists over normative economic analysis than over positive economic analysis. C) There is much more disagreement among economists over positive economic analysis than over normative economic analysis. D) Unlike normative economic analysis, positive economic analysis can be tested.

Explanation / Answer

4) Normative Economics is a branch of economics which describes what set of policies should be followed or what is ought to be followed and what will be the likely outcomes of those policies.

D) Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable.

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5) Positive Economics is a branch of economics which describes what policies are being taken and what are the effects of the policy. Positive economics is mainly fact based and it can be proved or disproved at any point of time.

C) There is much more disagreement among economists over positive economic analysis than over normative economic analysis.

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