1.1 - Positive and Normative statements

Question 1

Positive statements

Answer 1

Objective, factual statements that can be scientifically tested and verified.

Question 2

Normative statements

Answer 2

Subjective statements that involve value judgements and opinions.

Question 3

When are positive statements important in economics?

Answer 3

Economists use positive statements to analyse and understand economic phenomena objectively.

Question 4

When are normative statements important?

Answer 4

Normative statements are important in shaping economic policies but are influenced by personal values and beliefs.

Question 5

Value Judgements in Economic Decision Making

Answer 5

Economic decisions often involve choices influenced by individual or societal values.
Policies such as taxation, subsidies, and regulations are shaped by value judgements.

Question 6

Conflicts in Values

Answer 6

Different people and groups may hold conflicting values, leading to debates over economic policies.

Question 7

Economists and Value Neutrality

Answer 7

• Economists strive for value neutrality by focusing on positive analysis.
• They provide policymakers with objective data and analysis to inform decisions.

Question 8

Ethical Considerations

Answer 8

• Ethical considerations play a role in economic decisions and policies.
• Decisions on resource allocation, distribution of wealth, and environmental protection often involve ethical judgements.

Question 9

Public Opinion and Economic Policy

Answer 9

• Public opinion, shaped by values and beliefs, can influence government policies.
• Policymakers may align their decisions with prevailing values to gain public support.