The Economic Analysis of Minimum Wage Involves Both Normative and Positive

question 161

Multiple Choice

The economic analysis of minimum wage involves both normative and positive analysis.Consider the following consequences of a minimum wage:
A.The minimum wage law causes unemployment.
B.A minimum wage law benefits some groups and hurts others.
C.In some cities such as San Francisco and New York, it would be impossible for low-skilled workers to live comfortably in the city without minimum wage laws.
D.The gains to winners of a minimum wage law should be valued more highly than the losses to losers because the latter primarily comprises businesses.
Which of the consequences above are positive statements and which are normative statements?

• A)a, b, and c are positive statements and d is a normative statement.
• B)a and b are positive statements, c and d are normative statement.
• C)Only a is a positive statement, b, c, and d are normative statements.
• D)a and c are positive statements, b and d are normative statements.

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Definitions:

Cognitive Structures

Mental frameworks that help individuals organize and interpret information, fundamental to learning and understanding.

Accommodation

In psychology, a cognitive process that involves altering one's existing schemas, or ideas, as a result of new information or experiences.

Piaget's Theory

A theory of cognitive development that describes how children's intellectual abilities evolve through distinct stages as they grow.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or touched, a concept developed in early childhood.