Refer to Scenario 1.1 below to answer the question(s) that follow.
SCENARIO 1.1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment. The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time. The economist concludes that a 1% increase in minimum wage causes a 0.2% increase in teenage unemployment. From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers.
-Refer to Scenario 1.1. The statement that a 1% increase in the minimum wage causes a 0.2% increase in teenage unemployment is an example of
A) equity.
B) normative economics.
C) positive economics.
D) Ockham's razor.

Question

Quizplus · Accepted Answer

The statement is an example of positive economics because it describes a relationship between two variables (minimum wage and teenage unemployment) based on empirical evidence, without making a judgment about whether the outcome is desirable. Positive economics deals with what is or what the effect of a certain policy or condition will be, rather than what should be.