--%>
Assignment Help - homework help

Positive economic analysis and normative

Which of the given two statements involves positive economic analysis and which normative? How do the two type of analysis differ?
a. Gasoline rationing (allocating to each year to each individual an annual maximum amount of gasoline which can be purchased) is a poor social policy as it interferes along with the workings of the competitive market system.
b. Gasoline rationing is policy under which more people are made worse off than are made better off.
Positive economic analysis explains what is. Normative economic analysis explains what have to be. We know from economic analysis that constraint placed on supply will change the market equilibrium.

  • Statement (a) merges both kind of analysis. Firstly, statement (a) makes positive statement that gasoline rationing "interferes along with the workings of the competitive market system." Secondly, by making the normative statement (that means a value judgment) that gasoline rationing is a "poor social policy," statement (a) confines itself to conclusion derived from positive economic analysis of the policy.
  • Statement (b) is positive because it defines what the effect of gasoline rationing is without making a value judgment regarding the desirability of the rationing policy.

   Related Questions in Microeconomics

  • Q : Illustration of complementary goods

    Prices cross elasticity of demand of two between cable TV and VCRs entails that such goods are: (1) complementary goods. (2) substitute goods. (3) negatively associated goods. (4) a luxury and a need, respectively. (5) both inferior goods.

  • Q : Trade Restrictions of import and export

    Quotas that restricted U.S. imports of foreign steel between 2001 and 2004 because of the: (w) prices paid by U.S. car buyers to rise. (x) price of gasoline to rise sharply. (y) profits of U.S. steelmakers to drop. (z) quantities of European imports t

    		•
  • Q : Positive economic profit and accounting

    Purely competitive equilibrium, in long-run firms normally experience positive accounting profit and economic profit which is: (w) also positive, but smaller. (x) zero. (y) negative, but barely that why. (z) either positive, zero, or negative.

  • Q : State government budget Government

    Government budget: Government budget demonstrates the estimated receipts and estimated expenses of the government for 1-year.

    		•
  • Q : Quantity demanded and goods price The

    The law of demand defines that there is a negative relationship among: (1) A good’s price and quantity demanded. (2) Limitless demands and inadequate resources. (3) The quantities demanded and supplied. (4) People’s income and demands for

    		•
  • Q : Price equality with marginal costs It

    It is not possible for a nondiscriminating, that profit maximizing monopolist to attain equilibrium where MR = MC as well as: (w) economic profit = 0. (x) economic profit is negative. (yz marginal costs are at the minimum of average costs [MC = ATC].

    		•
  • Q : Demand when coefficient of price

    When the coefficient of price elasticity for eggs is 0.67, in that case the demand for eggs is: (w) relatively elastic. (x) relatively inelastic. (y) an upward sloping demand. (z) a horizontal demand. I need a good

    		•
  • Q : Demand for a good at price elasticity

    The curve which could demonstrate the demand for a good which has price elasticity equal to one is within: (w) Panel A. (x) Panel B. (y) Panel C. (z) Panel D.

    Q : Marginal revenue for purely competitive

    For a purely competitive firm and for a nondiscriminating unregulated monopolist, the marginal revenue is: (1) identical to the price per unit of output. (2) equal to marginal cost when profit is maximized. (3) greate

    		•
  • Q : Limited liability of the owners I have

    I have a problem in economics on Limited liability of the owners. Please help me in the following question. The limited liability of the owners is one of the main benefits of: (i) Partnerships. (ii) Corporations. (iii) Wandering confidence schemers. (iv) Sole propriet

    		•