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Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman
Edition 6ISBN: 978-1133708735Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman
Edition 6ISBN: 978-1133708735 Exercise 1
Discuss whether each statement is a purely positive statement,or whether it also contains normative elements and/or value judgments:
a. An increase in the personal income tax will slow the growth rate of the economy.
b. The goal of any country's economic policy should be to increase the well-being of its poorest,most vulnerable citizens.
c. The best way to reduce the national poverty rate is to increase the federal minimum wage.
d. The 1990s were a disastrous decade for the U.S. economy. Income inequality increased to its highest level since before World War II.
a. An increase in the personal income tax will slow the growth rate of the economy.
b. The goal of any country's economic policy should be to increase the well-being of its poorest,most vulnerable citizens.
c. The best way to reduce the national poverty rate is to increase the federal minimum wage.
d. The 1990s were a disastrous decade for the U.S. economy. Income inequality increased to its highest level since before World War II.
Explanation
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Positive economics generally deals with working of an economy. It commentates on the working of an economy.
Statements made under positive economics can be judged through facts.
Normative economics generally deals with prescription of solutions to various economic problems.
These statements depend on the values of the person making the statement and also these statements cannot be judged merely through facts.
(a)The given statement is purely positive statement as it commentates on the working of an economy.
Secondly,this statement can be judged through facts.
(b)The given statement is a value judgment as it reflects the values of the person making the statement who thinks on the line that welfare of the poorest and vulnerable citizens should be the ultimate goal of a country's economic policy.
Secondly,this statement cannot be judged by facts merely.
(c)The given statement is a normative statement as it prescribes a solution (increase in federal minimum wage)to economic problem (reduction of national poverty rate).
Secondly,this statement cannot be approved or disapproved by the facts alone and requires much deeper understanding of the subject concerned.
(d)The given statement is purely positive statement as it commentates on the working of an economy.
Secondly,this statement can be judged through facts.
Statements made under positive economics can be judged through facts.
Normative economics generally deals with prescription of solutions to various economic problems.
These statements depend on the values of the person making the statement and also these statements cannot be judged merely through facts.
(a)The given statement is purely positive statement as it commentates on the working of an economy.
Secondly,this statement can be judged through facts.
(b)The given statement is a value judgment as it reflects the values of the person making the statement who thinks on the line that welfare of the poorest and vulnerable citizens should be the ultimate goal of a country's economic policy.
Secondly,this statement cannot be judged by facts merely.
(c)The given statement is a normative statement as it prescribes a solution (increase in federal minimum wage)to economic problem (reduction of national poverty rate).
Secondly,this statement cannot be approved or disapproved by the facts alone and requires much deeper understanding of the subject concerned.
(d)The given statement is purely positive statement as it commentates on the working of an economy.
Secondly,this statement can be judged through facts.
Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman
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