Positive Economics Vs Normative Economics

 

Positive Economics Vs. Normative Economics

Positive Economics : 

• What is, was, or will be (What actually happens?)
• Description of economic phenomena.
• Objective.
• How an economic agent behaves.
• Analyses the consequences of policies.
• No value judgement.
• Generally testable.

e.g. The effects of minimum wage regulation passed by govt.

Normative Economics :

• what ought to be (What one would like to happen?) judgement of economic phenomena.
•  Subjective.
•  How an economic agent should behave.
• What policy a govt. should take.
• Value judgement present.
• Never testable.

e.g. Whether the govt. should implement the minimum wage act at all.