The Economic Analysis of Minimum Wage Involves Both Normative and Positive

question 316

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 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; d is a normative statement.
• B) a and b are positive statements; c and d are normative statements.
• 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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