Question

Economists are careful in differentiating between positive and normal statements. Which of the following is a normative statement?

A) Fifty is less than forty.

B) The city council should increase minimum wages to restore economic efficiency.

C) Binding price ceilings create a surplus of a good.

D) When the minimum wage increases, the quantity demanded of labor decreases.

Answer 1

The normative statement among the options provided is "The city council should increase minimum wages to restore economic efficiency," as it reflects an opinion rooted in values rather than empirical evidence.

Step-by-step explanation:

Economists distinguish between positive statements, which are based on factual and testable assertions about the world, and normative statements, which are based on subjective opinions and personal values about how the world should be.

The statement "The city council should increase minimum wages to restore economic efficiency" is an example of a normative statement because it includes the word 'should,' indicating it is based on values and opinions about what is believed to be right or desirable rather than on empirical evidence.