Given below are two statements:
Statement I: Studying how the price of wheat is determined in the market for wheat is a part of microeconomics.
Statement II: The view that the government should sell wheat cheaply to poor families is a normative statement.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Both Statement I and Statement II are true.
Statement I: Studying how the price of wheat is determined in the market for wheat is a part of microeconomics. — True. Microeconomics studies how the price and quantity of a good are determined in its own market.
Statement II: The view that the government should sell wheat cheaply to poor families is a normative statement. — True. The word ‘should’ shows a judgement about what is desirable. Judging what is desirable is normative.
NCERT (2026-27): “1.5 Microeconomics and Macroeconomics Traditionally, the subject matter of economics has been studied under two broad branches: Microeconomics and Macroeconomics. In microeconomics, we study the behaviour of individual economic agents in the markets for different goods and services and try to figure out how prices and quantities of goods and services are determined through the interaction of individuals in these markets. …” “1.4 Positive and Normative Economics … Often a distinction is made between positive economic analysis and normative economic analysis depending on whether we are trying to figure out how a particular mechanism functions or we are trying to evaluate it. In positive economic analysis, we study how the different mechanisms function, and in normative economics, we try to understand whether these mechanisms are desirable or not. …” |