Classify the following as positive economics statements or normative economics statements
a) An increase in an individual's income increases consumption, but by an amount less than the increase in income.
b) The government should undertake the responsibility of providing healthcare to all its citizens.
c) A trade deficit can be advantageous to an economy.
d) An increase in net exports has a positive effect on a country's national income.
e) The gross domestic product of India is increasing at 5% annually.
The statements can be classified as follows:
a) An increase in an individual's income increases consumption, but by an amount less than the increase in income: Positive economic statement
b) The government should undertake the responsibility of providing healthcare to all its citizens: Normative economic statement
c) A trade deficit can be advantageous to an economy: Normative economic statement
d) An increase in net exports has a positive effect on a country's national income: Positive economic statement
e) The gross domestic product of India is increasing at 5% annually: Positive economic statement
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Figure 11-3
In Figure 11-3, which line represents the change in the consumption schedule caused by an increase in the residential property tax?
a.
C1 in graph (a)
b.
C2 in graph (a)
c.
C1 in graph (b)
d.
C2 in graph (b)
One application of the production possibilities concept has been to explain the difference in growth patterns of a nation with a high level of investment (Alta) and an equivalent nation with a low level of investment (Zorn). Use the concept to explain
why Alta’s economic growth would be greater than that of Zorn over time. Please provide the best answer for the statement.