Question : Statement 1: Positive economics aims to determine how changes in the price of a good affect its quantity demanded.
Statement 2: Normative economics focuses on analyzing the impact of government policies on consumer behavior.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statements 1 and 2 are true.
Option 4: Both statements 1 and 2 are false.
Correct Answer: Statement 1 is true, and statement 2 is false.
Solution : The correct answer is (a) Statement 1 is true, and statement 2 is false.
Statement 1 is true: Positive economics aims to determine how changes in the price of a good affect its quantity demanded. It focuses on objective analysis and explaining economic phenomena as they are.
Statement 2 is false: Normative economics involves making value judgments and prescribing what economic policies should be implemented. It is concerned with how things should be rather than analyzing the impact of specific government policies on consumer behavior.
Therefore, statement 1 is true, and statement 2 is false.
