1.1.2 Positive and Normative statements

• Define Normative Statements

  -A statement which cannot be supported or refuted because it is a value judgement

  -They are subjective statements(personal/individual opinion)
• Define Positive Statement

  -A statement which can be supported or refuted by evidence

  -They are objective statements (applies to everyone)
• Why is value judgements in economics important ?

  -Value judgments are important in economics because they can influence economic decision making and policy
• Give examples of Value Judgements in Influencing Economic Decision Making and Policy

  -Policies such as taxation, subsidies, and regulations are shaped by value judgments

  
  

  -Conflicts in Values - Different people and groups may hold conflicting values, leading to debates over economic policies

  
  

  -Economists and Value Neutrality - Economists strive for value neutrality by focusing on positive analysis - They provide policymakers with objective data and analysis to inform decisions

  
  

  -Ethical Considerations - Decisions on resource allocation, distribution of wealth, and environmental protection often involve ethical judgments

  
  

  -Public Opinion and Economic Policy - Public opinion, shaped by values and beliefs, can influence government policies - Policymakers may align their decisions with prevailing values to gain public support