Micro-Econ Ch.1 Scenarios & Statement Analysis

Statement: "An increase in the minimum wage will cause a decrease in employment among the least

skilled."

Statement: "The income gains from a higher minimum wage are worth more than any slight reductions in employment."

Normative. This is a prescriptive claim involving a value judgment about what policy outcome is "worth" more.

Positive Statement Definition & Economic Role

A descriptive statement attempting to describe the world as it is. Used when economists act as scientists trying to explain economic behavior.

Normative Statement Definition & Economic Role

A prescriptive statement about how the world should be. Used when economists act as policy advisors trying to change policy.