Final answer:
Normative statements are subjective and prescribe ideals based on values, while positive statements are objective and describe the world as it is. Normative statements cannot be empirically tested, unlike positive statements which can be.
Step-by-step explanation:
In economics, a distinction is made between positive statements and normative statements. Positive statements are objective and can be tested for their truth value. They attempt to describe what happens and why it happens through factual representation of the world. On the other hand, normative statements are subjective and pertain to what ought to be, prescribing values or ideals. These statements are not testable since they are based on opinions and values.
For example, an economist analyzing a proposed subway system and determining that the expected benefits exceed the costs is making a positive statement. In contrast, an economist who argues for extended unemployment compensation during a crisis, on the grounds that a wealthy nation should support the less fortunate, is making a normative statement. These are reflective of the concepts that positive statements attempt to describe the way the world works, while normative statements attempt to prescribe what should be done.