Which of the Following Statements Has Both Positive and Normative

question 45

Multiple Choice

Which of the following statements has both positive and normative aspects to it?

• A)Reducing taxes on telecommunications will lower the price for consumers and encourage families to communicate with one another more frequently.
• B)Reducing the minimum wage will lead to lower unemployment and a lower average wage.
• C)Increasing taxes on gasoline will lead to lower fuel consumption and fewer automobiles being sold each year.
• D)Taxing alcohol leads to lower alcohol consumption per year.

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Definitions:

Liability Rule

A legal principle that allows for compensation when someone's action causes harm or loss to another, even without an agreement between the parties.

Injunction

A legal order by a court requiring a person or entity to do or cease doing a specific action.

Coase Theorem

An economic theory that suggests that private parties can solve the problem of externalities among themselves, regardless of the initial distribution of rights, as long as property rights are well-defined and transaction costs are low.

Pollution Reduction

Actions or strategies aimed at decreasing the amount of pollutants released into the environment.