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Positive & Normative Economics and Market Efficiency Evolution

1) What is the difference between positive and normative economics? Which is more prevalent in today's economies? Why? What role, if any, do ethics play in positive economics? What role do ethics play in normative economics?

2) Can market efficiency evolve on its own without government intervention? Why or why not? What role do ethics play in market efficiency?

3) If resources became freely available in unlimited quantities, would there still be a need for economics?

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1) What is the difference between positive and normative economics? Which is more prevalent in today's economies? Why? What role, if any, do ethics play in positive economics? What role do ethics play in normative economics?

The difference between positive economics and normative economics is that positive economics is related to description and explanation of economic happenings. On the other hand normative economics is related to passing value judgments. The normative economics is related to passing judgments about what the economy should be rather than what the economy actually is. The normative economics gives opinions about what the ideal state of the economy should be. On the other hand, positive economics focuses on what the economy is now. The objective of positive economics is to understand the cause-and effect relationships and at the same time test the economics theories in real life (a).

What is more prevalent in today's life is positive economics. The reason is that it carries out meaningful analysis of economic behavior. Further, because of its descriptive nature, positive economics refrains from passing judgments on decisions and phenomena. Ethics plays an important role in positive economics. The descriptive role of ...

Solution Summary

This explanation provides a detailed look at these facets of accounting ethics by looking at the individual vs the whole economy, government involvement in market evolution and what would happen under the hypothetical condition that resources were no longer limited or costly. 760 words with 1 reference.

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