Positive versus normative assumptions
"Some people see things as they are, and ask 'Why?' I see things as they might be, and ask 'Why not?'"Key concepts:
1. Assumption: a statement taken for granted or accepted as true
without proof.
2. Positive statement concerns "what is" and is intended to
be value-free.
3: Normative statement concerns "what should be" and is
intended to include value judgments and assessments.
Each of the following statements is drawn from the law and economics literature. Decide whether you consider each statement to qualify as an assumption that accurately characterizes positive economics.
a. It is assumed that "man is a rational maximizer of his ends in life, his satisfactions--what we call his 'self-interest.'"
b. "It is assumed that the individual is the best judge of his own welfare."
c. "Each actor is assumed to be motivated by an unlimited desire to acquire or consume."