Distinguish between a positive statement and a normative statement and provide examples
What will be an ideal response?
A positive statement is a description of how the world is. It is testable. A normative statement is a description of how the world ought to be. It is, by its very nature, not testable because there is no universally approved criterion by which the statement can be judged. "I will receive an A for this course," is a positive statement made by an economics student—it might not be true, but it is testable. "I will receive a good grade for this course," is a normative statement. Whether someone agrees with it depends on his or her interpretation of what makes for a "good" grade.
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The above figure illustrates the marginal social benefit and marginal social cost for chicken sandwiches. If the quantity is decreased from 6 to 3 and the price increases from $3 to $4, consumer surplus will decrease by
A) $1.50. B) $2.00. C) $3.00. D) $4.50.
Which of the following inputs is most likely to be "fixed" in the short run?
A) Labor. B) Capital. C) Energy. D) Raw Material.