Which of the following is an example of a normative as opposed to positive statement?

QUESTION 1 Which of the following is an example of a normative, as opposed to positive, statement? a. If the price of a produ

QUESTION 4 a. Assume for Brazil that the opportunity cost of each cashew is 100 peanuts. Which of these pairs of points could

Answer

1. A normative statement focus on what the economy ought to be or should be. it simply shows the perception of an individual about the economy. whereas positive economics are objective statements that can be tested, rejected, or accepted based on the available evidence. thus option B is an example of a normative statement whereas all the remaining are positive statements as they can be checked whether true or false based on the available incidence. 2. PPF shows the combination of two goods which can be produced with the help of available resources and technology. if the opportunity cost of each cashew is 100 peanuts then for each additional cashew economy has to sacrifice 100 peanuts or to gain 100 peanuts it has to give up 1 cashew. thus option B is correct as 70000-60000/ 300-400 = – 100/1

thus to gain 100 peanuts economy sacrifise 1 sashew.  


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