Indicate Whether Each of the Following Is a Positive or Normative

question 1

Essay

Indicate whether each of the following is a positive or normative economic statement:
I.The imposition of a price ceiling below equilibrium price will lead to a shortage of housing.
II.The local government should control the rate of increase in rents so that low-income residents are not forced to move from the area.

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Definitions:

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated before the next period begins.

Cost of Goods Sold

The total cost of materials and labor needed to produce the goods or services sold by a company.

LIFO Inventory Method

An accounting method where the last items of inventory purchased are the first ones used or sold, affecting the cost of goods sold and ending inventory values.

FIFO Inventory Method

A method of accounting for inventory that assumes the first items placed in inventory are the first sold.