Question 1

Which of the following statements about normative analysis is correct?

Accepted Answer

Normative analysis is concerned with making value judgments about what "should" happen or what is desirable. As such, it often focuses on issues of social welfare, such as whether a policy or action will increase overall well-being or reduce inequality. It may involve subjective opinions and values, but it is not limited to them and may also consider empirical evidence and other objective factors.

Question 2

Suppose that we illustrate demand and supply with quantity on the horizontal axis and income on the vertical axis. Let demand be a function of price and income, Q^d (P, I). Which of the following statements is true?

Accepted Answer

The answer of Suppose that we illustrate demand and supply...

Question 3

Which of the following statements has both positive and normative aspects to it?

Accepted Answer

The statement includes both positive aspects (reducing taxes will lower prices and encourage communication) and normative aspects (it is good to encourage more communication among families).

Question 4

Which of the following represents an example of normative analysis?

Accepted Answer

Normative analysis involves making value judgments and assessing what should or ought to happen. The question "what is the best method for allocating tax revenues?" is an example of normative analysis as it requires making a judgment about the most optimal approach. The other options (A, B, and D) involve positive analysis, which is concerned with describing what is likely to happen without making any value judgments.

Question 5

Which of the following statements about positive analysis is correct?

Accepted Answer

Positive analysis is the study of "what is" in an economic system, and as such, it is concerned with predicting how an economic system will change over time. Choice A is incorrect because positive analysis does not prescribe the best solution, that is the function of normative analysis. Choice C is incorrect because positive analysis can be inaccurate if the model used does not accurately reflect the real world. Choice D is incorrect because while positive analysis is based on a model, the accuracy of the model depends on how well it reflects the real world, and it can be very relevant in understanding economic systems.

Question 6

Which of the following statements has neither positive nor normative aspects to it?

Accepted Answer

The answer of Which of the following statements has neither...

Question 7

Which of the following statements represents normative analysis?

Accepted Answer

Normative analysis involves making value judgments or recommendations based on one's opinions regarding what should or should not be done. Option C is an example of normative analysis as it is making a value judgment about the desirability of reducing dependence on foreign oil, and recommending a policy (subsidies to farmers) to achieve this goal. The other options are examples of positive analysis, which involves making factual statements about what is or what would be, without making any recommendations or value judgments.

Question 8

Which of the following represents an example of positive analysis?

Accepted Answer

Option A is an example of positive analysis because it involves predicting how a specific action will impact an economic variable (the equilibrium price of corn) without making any value judgments. The other options (B, C, and D) involve making value judgments about the best course of action, which is normative analysis.

Quiz 1: Analyzing Economic Problems

Which of the following statements about normative analysis is correct?

Suppose that we illustrate demand and supply with quantity on the horizontal axis and income on the vertical axis. Let demand be a function of price and income, Q^d (P, I) . Which of the following statements is true?

Which of the following statements has both positive and normative aspects to it?

Which of the following represents an example of normative analysis?

Which of the following statements about positive analysis is correct?

Which of the following statements has neither positive nor normative aspects to it?

Which of the following statements represents normative analysis?

Which of the following represents an example of positive analysis?

Quiz 1: Analyzing Economic Problems

Which of the following statements about normative analysis is correct?

Suppose that we illustrate demand and supply with quantity on the horizontal axis and income on the vertical axis. Let demand be a function of price and income, Qd (P, I) . Which of the following statements is true?

Which of the following statements has both positive and normative aspects to it?

Which of the following represents an example of normative analysis?

Which of the following statements about positive analysis is correct?

Which of the following statements has neither positive nor normative aspects to it?

Which of the following statements represents normative analysis?

Which of the following represents an example of positive analysis?

Suppose that we illustrate demand and supply with quantity on the horizontal axis and income on the vertical axis. Let demand be a function of price and income, Q^d (P, I) . Which of the following statements is true?