Confronting Objections to the Economic Approach

Self-Check Questions

Individuals may not act in the rational, calculating way described by the economic model of decision making, measuring utility and costs at the margin, but can you make a case that they behave approximately that way?

Hint:

When individuals compare cost per unit in the grocery store, or characteristics of one product versus another, they are behaving approximately like the model describes.

Would an op-ed piece in a newspaper urging the adoption of a particular economic policy be a positive or normative statement?

Hint:

Since an op-ed makes a case for what should be, it is considered normative.

Would a research study on the effects of soft drink consumption on children’s cognitive development be a positive or normative statement?

Hint:

Assuming that the study is not taking an explicit position about whether soft drink consumption is good or bad, but just reporting the science, it would be considered positive.