1.It is often said that a good theory is one that can be refuted by an empirical, data-oriented study. Explain why a theory that cannot be evaluated empirically is not a good theory.
2. Which of the following two statements involves positive economic analysis and which normative? How do the two kinds of analysis differ?
a. Gasoline rationing (allocating to each individual a maximum amount of gasoline that can be purchased each year) is poor social policy because it interferes with the workings of the competitive market system.
b. Gasoline rationing is a policy under which more people are made worse off than are made better off.