Maneesha has completed an analysis of the market for a prescription medication. She has determined that the policymaker should act to prevent an increase in the price of this drug on the grounds that the mainly elderly consumers of the medication already have spent their lives paying too much for pharmaceuticals. They ought not to have to pay higher prices, Maneesha has concluded, so the government should act to halt any further price increases in this market. Has Maneesha applied positive or normative economic analysis?

Question

Maneesha has completed an analysis of the market for a prescription medication. She has determined that the policymaker should act to prevent an increase in the price of this drug on the grounds that the mainly elderly consumers of the medication already have spent their lives paying too much for pharmaceuticals. They ought not to have to pay higher prices, Maneesha has concluded, so the government should act to halt any further price increases in this market. Has Maneesha applied positive or normative economic analysis?

Part 2
Maneesha has applied ---a. positive or b. normative ---economic analysis because her finding---c. is.or d. is not--- a value judgment or a statement of her subjective feelings.

Answer 1

Maneesha has applied normative economic analysis because her finding is a value judgment or a statement of her subjective feelings.

Answer 2

Part 1: Maneesha has applied normative economic analysis. Normative economics deals with value judgments and subjective opinions about what should or should not happen in the economy. In this case, Maneesha's recommendation to the policymaker is based on her belief that the elderly consumers should not have to pay higher prices.

Part 2: Maneesha has applied normative economic analysis because her finding is a value judgment. She is expressing her subjective feelings about what the government should do to prevent price increases in the market for the prescription medication.