Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 2 - Part I - Thinking Like an Economist - Questions for Review: 9

Answer

Positive statements are claims that attempt to describe the world as it is. An example of a positive statement is “An increase in productivity in an economy raises the standard of living for the people in the economy.” Normative statements are claims that attempt to prescribe how the world should be. An example of a normative statement is “Firm A should lower the prices of their goods.”

Work Step by Step

Positive statements are descriptive and attempt to make a factual statement about the world. Normative statements, on the other hand, are prescriptive. They are value judgments about how a person thinks the world ought to be.
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