Microeconomics: Introduction · Class 11 · CBSE · Commerce Economics
Distinguish between positive economics and normative economics, giving one example of each.
Practice question from Microeconomics: Introduction (Class 11 · CBSE · Commerce Economics), with the correct answer and a step-by-step solution.
medium · Subjective · Q-575054
Distinguish between positive economics and normative economics, giving one example of each.
Answer: Positive economics deals with statements that can be tested using facts and evidence, such as “An increase in the price of a good reduces its quantity demanded, other things remaining constant.” Normative economics deals with value judgments about what ought to be, such as “The government should provide free healthcare to all citizens.”
Solution
Positive economics explains and analyses facts or cause-and-effect relationships. Normative economics expresses opinions or value judgments about desirable policies and outcomes.
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