The statement that 'increases in the tax on petrol increase the price of petrol' is an example of which of the following?
A) Marginal statement.
B) Rational-decision statement.
C) Macroeconomic statement.
D) Positive statement.
E) Normative statement.

Question

Quizplus · Accepted Answer

The statement is a positive statement because it describes a cause-and-effect relationship in the economy. It is not a normative statement because it does not express any value judgment about whether the tax increase is good or bad. It is not a marginal statement because it does not refer to the incremental changes in tax or price. It is not a rational-decision statement because it does not pertain to the decision-making process of individual agents. It is not a macroeconomic statement because it focuses on a specific market (petrol).

The Statement That 'Increases in the Tax on Petrol Increase