State whether each of the following questions is positive or

State whether each of the following questions is positive or normative. Explain briefly.

a). How much oil conservation (from switching to smaller cars, carpooling, etc.) will a $0.50 per gallon tax on gasoline achieve?

b). Are taxes on wealthy citizens of the United States too high?

Solution

Positive economics is objective and fact based, while normative economics is subjective and value based. Positive economic statements do not have to be correct, but they must be able to be tested and proved or disproved. Normative economic statements are opinion based, so they cannot be proved or disproved.

So the first statement is positive while the second one is normative.

The secon statement is an invidual opinion which cannot be disproved neither can be proved, where the first statement is totally fact based and can be tested to prove or disprove it.