What you’ll learn to do: differentiate between positive and normative statements

What choices does society have about how it uses its resources?—”What is possible?” we might ask. Also, what is the right thing to do with the resources we have?—”What should we choose,” we might ask. These are very different questions that lead to very different kinds of responses and statements.

In this section we are going to consider the difference between positive and normative statements and their role in economics. Positive statements are objective. Normative statements are subjective. Good economists are careful to differentiate between the two. In this section, we will learn to differentiate between descriptions of the world as it is and the world as it should be.

The specific things you’ll learn in this section include the following:

• Define positive and normative statements
• Provide examples of positive and normative statements

Learning Activities

The learning activities for this section include the following:

• Video: Positive and Normative Analysis
• Reading: Positive and Normative Statements
• Self Check: Positive and Normative Statements