Question 2 (a)

A positive and a normative statement, with the test that separates them

4 marks

Time to write: About 8 minutes
Topic: Economic models, incentives, efficiency and equity

Question

Question 2 (a) · 4 marks

Give one example each of a positive and of a normative statement.

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

8 minfor 4 marks

Read from the question

exampleExamples are asked for: one short example with each point.

Write it in this order

Read; underline the asks; jot your points 1 min
1 A positive statement, its meaning and an example with the reason 2 marks 3 min
2 A normative statement, its meaning and an example with the reason 2 marks 3 min
Check: every ask answered, key terms underlined 1 min

Short on time? Trim steps 1 and 2 evenly rather than skip one: each is capped at its own marks.

Try it first. About 8 minutes for 4 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

Positive and normative analysis. Economics both explains and evaluates. Positive analysis works out how an economic arrangement functions and what outcomes it leads to; normative analysis asks whether those outcomes, or the arrangement itself, are desirable. A positive statement therefore describes or predicts; a normative statement judges or recommends.

A positive statement. Example (our own): If the GST rate on small cars is raised from 28 per cent to 35 per cent, fewer small cars will be sold in India next year.

It is a claim about cause and effect: a higher tax raises the price buyers pay, and quantity demanded falls when the price rises.
It can be checked against facts, by comparing car sales before and after the change. It may turn out right or wrong, but either way it is settled by evidence, not by opinion.

A normative statement. Example (our own): The government ought to remove GST on life-saving medicines altogether.

It contains a value judgment, signalled by ought to: it says what should be done, not what will happen.
No data can prove it true or false. Two people who agree on every fact (how much revenue would be lost, how much cheaper medicines would become) can still disagree about it, because they weigh affordability for patients against revenue for other public spending differently.

The test.

Basis	Positive statement	Normative statement
What it does	Describes or predicts	Judges or recommends
Settled by	Facts and evidence	Values
Typical words	is, will, causes	should, ought to, better
Our example	Higher GST on small cars reduces their sales	GST on life-saving medicines ought to be removed

The two kinds are linked: a good recommendation needs a correct understanding of how things work, so the distinction is not a sharp one.

Conclusion. The statement that a higher GST on small cars will reduce their sales is positive, because evidence can test it; the statement that GST on life-saving medicines ought to be removed is normative, because it rests on a value judgment.

Where the 4 marks sit

#	Component	Marks
1	A positive statement, its meaning and an example with the reason	2
2	A normative statement, its meaning and an example with the reason	2
	Total	4

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