nation’s highways.
Ans: C
Difficulty: Medium
Heading: Positive and Normative Analysis
LO 3 Explain the difference between positive and normative analysis
45. Which of the following statements has both positive and normative aspects to
it?
a) Reducing taxes on telecommunications will lower the price for
consumers and encourage families to communicate with one another
more frequently.
b) Reducing the minimum wage will lead to lower unemployment and a
lower average wage.
c) Increasing taxes on gasoline will lead to lower fuel consumption and
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fewer automobiles being sold each year.
d) Taxing alcohol leads to lower alcohol consumption per year.
Ans: A
Difficulty: Medium
Heading: Positive and Normative Analysis
LO 3 Explain the difference between positive and normative analysis
46. Which of the following statements has neither positive nor normative aspects
to it?
a) On hot days, people drink more water.
b) Hot weather leads to greater numbers of heat exhaustion cases.
c) Providing free space heaters to poor people can reduce certain types of
respiratory illness.
d) Hot weather is desirable.
Ans: D
Difficulty: Medium
Heading: Positive and Normative Analysis
LO 3 Explain the difference between positive and normative analysis
47. Which of the following represents an example of positive analysis?
a) How will the equilibrium price of corn be affected by a government
subsidy?
b) What is the best way to assist low-income families with affordable
housing?
c) Would taxes on emissions be the best way to reduce pollution?
d) How can the government best design a tax cut?
Ans: A
Difficulty: Easy
Heading: Positive and Normative Analysis
LO 3 Explain the difference between positive and normative analysis
48. Which of the following represents an example of normative analysis?
a) How will the equilibrium price of coffee be affected by drought?
b) How will a government subsidy affect the quantity demanded of public
housing?
c) What is the best method for allocating tax revenues?
d) How will a tax cut affect a typical consumer’s disposable income?
Ans: C
Difficulty: Easy
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Heading: Positive and Normative Analysis
LO 3 Explain the difference between positive and normative analysis
17