Question

TheThe economic analysis of minimum wage involves both normative and positive analysis. Consider the following consequences of a minimum wage: a. The minimum wage law causes unemployment. b. Unemployment would be lower without a minimum wage law. c. Minimum wage laws benefit some workers and harm others. d. The minimum wage should be more than $7.25 per hour. economic analysis of minimum wage involves both normative and positive analysis. Consider the following consequences of a minimum wage:

Answer 1

a. The minimum wage law causes unemployment. - Positive statement

This is a positive statement because it describes a factual statement about minimum wage. It does not say whether minimum wage is a good thing or not, even if the inherent quality of the statement can be somewhat inferred.

b. Unemployment would be lower without a minimum wage law. - Postive statement.

This is a positive statement for the same reasons as the statement above. Besides, this statement says exactly the opposite as the statement above.

c. Minimum wage laws benefit some workers and harm others. - Positive statement.

This statement is also positive, it does not establish whether minimum wage is a good or a bad, thing, and it also does not recommend any policy regarding minimum wage.

d. The minimum wage should be more than $7.25 per hour. - Normative statement.

This above is a normative statement. It clearly establishes a preference when it comes to minimum wage, and recommends a public policy according to it: $7.25 per hour.