How many of the following are normative statements?
(A) More resources should be spent on basic education than on higher education.
(B) Production, exchange and consumption are among the basic economic activities of life.
(C) Every family ought to get a minimum amount of food.
(D) In microeconomics, we study how the prices and quantities of goods are determined in markets.
(E) The government should play a smaller role in the economy.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Three
A normative statement judges what is desirable, often with ‘should’ or ‘ought’. A positive statement only describes how things are or how they work.
(A) More resources should be spent on basic education than on higher education. — Normative. It says what should be done.
(B) Production, exchange and consumption are among the basic economic activities of life. — Positive. It describes the basic economic activities.
(C) Every family ought to get a minimum amount of food. — Normative. ‘Ought’ marks a judgement.
(D) In microeconomics, we study how the prices and quantities of goods are determined in markets. — Positive. It describes what a branch of economics studies.
(E) The government should play a smaller role in the economy. — Normative. It judges what the government’s role should be.
(A), (C) and (E) are normative: three in all.
NCERT (2026-27): “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. However, this distinction between positive and normative economic analysis is not a very sharp one. …” |