Question

1. is this statement normative or positive? “an income subsidy will decrease the number of hours people choose to work.”

2. romo’s income elasticity of demand for iced coffee is e=-3. if romo gets 3% cost of living adjustment, what happens to his demand for iced coffee

3. the demand function for cookies is Q =12-2p, for what price is elasticity equal to 1

4. will this firm shutdown? Q=5, price=$30, MC=$10, AVC=$25, AFC=$3

Answer 1

Sol :

1.  it is a positive statement .

Positive statement means the the statement which are made on the basis of some fact. Whereas Normative statement means the statement which gives or provides only judgment .

So, above statement is based on the fact , it is the positive statement.

(Note : As , per the policy we have to solve only 1 question per post. )