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2. Explain the difference between normative and positive statements
In general, statements about the world come in two types. One type, is positive. Positive
statements are descriptive. They make a claim about how the world is. A second type of
statement, is normative. Normative statements are prescriptive. They make a claim about how
the world ought to be. Much of economics is positive: It just tries to explain how the economy
works. Yet those who use economics often have normative goals: They want to learn how to
improve the economy. Positive and normative statements are fundamentally different, but within
a person's set of beliefs, they are often intertwined. In particular, positive views about the world
works affects normative views about what policies are desirable.
33. Explain the effects of cartels on market and consumer. How the governments may prevet
cartels
A cartel is an organization created from a formal agreement between a group of producers of a
good or service to regulate supply in order to regulate or manipulate prices. In other words, a
cartel is a collection of otherwise independent businesses or countries that act together as if they
were a single producer and thus can fix prices for the goods they produce and the services they
render, without competition. Cartels have a negative effect on consumers because their existence
results in higher prices and restricted supply. Cartels operate at a detriment to the consumer in
that their activities aim to increase the price of a product or service over the market price. Their
behavior, however, is also adversely impactful in other ways. Cartels discourage new entrants
into the market, acting as a barrier to entry. Lack of competition due to price-fixing agreements
lead to a lack of innovation. Antitrust laws in the United States and some other countries expose
cartels to criminal and civil penalties. The wave of recent high-profile cartel indictments, leading
in many cases to large fines and prison sentences for corporate executives, suggests that antitrust
laws may have a substantial deterrence effect
56. If labor Demand: LD=13 – 1/3 W and labor Supply is Ls=1/2W – 2. Find the
equilibrium wage (W*) and employment level (L*) . İllustrate your answer by using a
diagram.(medium) (Numerical solution about wage and employment determination)
Ld=Ls=L
13-1/3W=1/2W-2
