Consider the following definitions.
Definition I) A subjective statement that contains a value judgment about costs and benefits.
Definition II) A description of how the world is.

Question

BlackTom AI · Accepted Answer

Take a careful look at what each definition is saying about costs and benefits versus descriptions of the world.
Option A: 'Both definitions are Positive.' This is inaccurate because Definition I involves a value judgment about costs and benefits, which makes it normative rather than positive. Positive statements attempt to describe how the world is, without prescribing values.
Option B: 'Definition I is Normative and Definition II is Positive.' This aligns with standard economic distinctions: I makes a value-laden claim about what ought to be (normative), while II merely describes the world as it is (positive).
Option C: 'Both definitions are Normative.' This misclassifies Definition II, which is simply a factual description of reality, not a value-laden judgment. Therefore it cannot be normative.
Option D: 'Definition I is Positive and Definition II is Normative.' This reverses the correct interpretation: I is not merely describing costs and benefits but stating how they ought to be weighed, which is normative, whereas II is a descriptive statement about the world and thus positive.

econ_102_120251_245625 Week 01 Quiz

Consider the following definitions. Definition I) A subjective statement that contains a value judgment about costs and benefits. Definition II) A description of how the world is.

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