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:

Vulnerable Personality

A term describing individuals who are more susceptible to psychological distress, manipulation, or harm due to certain personality traits.

Drinking-group Values

The norms and beliefs held by a group of individuals regarding the consumption of alcohol.

Prealcoholic Stage

The initial phase in the development of alcoholism, characterized by occasional, social, or stress-related alcohol use that may escalate to dependency.

Drinking Group's Beliefs

The shared perceptions and values that members of a group who regularly consume alcohol together hold, particularly regarding the nature and effects of their drinking behaviors.