What Is the Difference Between Normative and Positive Economics

question 19

Multiple Choice

What is the difference between normative and positive economics?

• A)Normative economics concerns the how and why of economic activity while positive economics concerns what should be.
• B)Positive economics concerns what is, while normative economics concerns what should be.
• C)Both concern the how and why of economic activity, while only positive economics also concerns what should be.
• D)Neither deals with the how and why of economic activity, but normative economics concerns what should be.
• E)Positive economics is used in Microeconomics, while normative economics is used in Macroeconomics.

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Definitions:

Promotional Allowance

Financial incentives offered by manufacturers to retailers or distributors for promoting their products.

Predatory Pricing

The practice of selling goods or services at a lower price than the cost to produce them to eliminate competition and establish market dominance.

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The stages a product goes through from development to withdrawal from the market, including introduction, growth, maturity, and decline.

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Companies that operate primarily on the internet, offering goods, services, or information to a global audience.