The Difference Between a Positive Economic Statement and a Normativestatement

question 8

Multiple Choice

The difference between a positive economic statement and a normativestatement is that

• A)a positive statement must be true; a normative statement is often not true
• B)a normative statement must be true; a positive statement is often not true
• C)a positive statement can be verified; a normative statement cannot
• D)a normative statements can be verified; a positive statement cannot
• E)a positive economic statement is a moral judgment; a normative economic statement is not a
• Moral judgment

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Definitions:

Milk Shortage

A situation in which the supply of milk is insufficient to meet the demand in a given market or area, often leading to increased prices.

Price Ceiling

A legal maximum price set by the government for a particular good or service to prevent prices from becoming too high.

Market Economy

An economic system in which supply and demand from consumers drive the production of goods and services.

Price Floor

Price floor is a government or group-imposed limit below which prices cannot fall, typically set to ensure producers can cover their costs.