"An increase in the federal minimum wage causes an increase in unemployment among teenagers" is a:
A) statement of positive economics.
B) statement of normative economics.
C) testable value judgment.
D) fallacy of composition.

Question

Quizplus · Accepted Answer

This statement is a statement of positive economics, as it makes a factual claim about the relationship between the federal minimum wage and teenage unemployment, which can be tested through empirical evidence. It does not make any value judgments or prescribe what should be done, making it different from normative economics. It is also not a testable value judgment, as it is not based on subjective preferences or opinions. Lastly, it is not a fallacy of composition, as it does not make the mistake of assuming that what is true for one part of the economy is true for the whole economy.

"An Increase in the Federal Minimum Wage Causes an Increase