1.1.2 - positive and normative economic statements

2 types of investigation in economics

positive + normative

positive economics

scientific/objective study

can be verified based on evidence

normative economics

opinions based - value judgements + policy decisions

cannot be verified

what are value judgements

normative opinion on a positive statement

eg. ‘the government should make education free’, so you value education based on a stat given to you, whereas someone else might take that same stat and say ‘the government should scrap mandatory education’

economic decisions are rarely…

…right or wrong

economic decisions are usually…

…concerned with normative value judgements - a matter of opinion

how do people back their normative opintions

using positive economics to support their view