1.4 econ

In economics, positive statements are about

• microeconomics, not macroeconomics.

• the way things ought to be.

• the way things are.

• macroeconomics, not microeconomics.

A positive statement is

• about what is.

• valid only in the context of a model with simple assumptions.

• the result of a model's normative assumptions.

• about what ought to be.

A positive statement is

• one that does not use marginal concepts.

• about what is.

• always true.

• about what ought to be.

Which of the following are TRUE regarding "positive" statements? I. They describe what "ought to be." II. They describe what is believed about how the world appears. III. They can be tested as to their accuracy.

• I and II

• II and III

• I and III

• I, II and III

Positive and normative statements differ in that

• normative statements depict "what is" and positive statements depict "what ought to be."

• positive statements can be tested, whereas normative statements cannot.

• normative statements never use the word "should."

• normative statements can be tested, whereas positive statements cannot.

Positive economic statements

• can be tested against the facts.

• prescribe what should be.

• are related only to microeconomics.

• cannot be tested against the facts.

Which of the following is a positive statement?

• When the national unemployment rate is 9 percent, the unemployment rate for inner-city youth is often close to 40 percent.

• An unemployment rate of 9 percent is a national disgrace.

• Unemployment and inflation are equally important problems.

• Unemployment is a more important problem than inflation.

Which of the following is a positive statement?

• What to do with Social Security is the most important economic issue today.

• A 5 percent increase in income leads to a 3 percent increase in the consumption of orange juice.

• The United States should fight inflation even if it raises unemployment.

• Because they decrease productivity, labor unions should be eliminated.

Which of the following is a positive statement?

• The government ought to provide health care to everyone.

• People buy more of a good or service when its price falls.

• Corporations should be more socially responsible.

• The distribution of income is fair.

Which of the following is an example of a positive statement?

• Households are the primary source of saving.

• The foreign sector should be more tightly controlled.

• Government should not redistribute income.

• Business firms ought to contribute more to charities.