Question

3. Explain the difference between positive and normative economics. Then, go online and find one economic fact. State the fact positively and then state each one of them normatively.

4. Now, go surfing on the internet. Find 2 new sites that contain economic data. List their URL’s and a brief description of the data they contain. In your surfing, list two macroeconomic facts you have discovered and where. Then, list two microeconomic facts you have discovered and where. How do you know each of the facts you have discovered illustrate Macroeconomics? Microeconomics? Explain.

5. What is economic/scientific methodology? Why is it important? Explain how we would follow this methodology for the study of unemployment in the USA? (What steps would we go through, what would we look for and why? Be specific).

6. What is ceteris paribus? Why are we concerned with it? Is Economics the only field that deals with ceteris paribus?

Answer 1

3. Positive economics deals with empirical facts or observed economic phenomenon. For example, it has been observed that demand goes down when the price goes up. This is an empirically observed fact. So, this is an example of positive economics.

Normative economics is about opinions and value judgments on various aspects of economics. For example, some economists might say that the government should increase the minimum wage. This is related to an opinion or value judgment about how an economic aspect (minimum wage and government intervention) should be. So, this is an example of normative economics.

One economic fact I found on the Internet is about the rising trade surplus of China with the USA. I can state this fact as a positive economic statement as : 'China's trade surplus with the USA has increased in 2017'. It can be expressed as a normative economics as " USA should stop importing from China and focus on manufacturing in the USA"