Eco. 101 Online Quiz/Discussion (Understanding Normative&Positive Economics and Ceteris Paribus)

In the fields of economics and finance, ceteris paribus is often used when making arguments about cause and effect. An economist might say raising the minimum wage increases unemployment, increasing the supply of money causes inflation, reducing marginal costs boosts economic profits for a company, or establishing rent control laws in a city causes the supply of available housing to decrease. Of course, these outcomes can be influenced by a variety of factors, but using ceteris paribus allows all other factors to remain constant, focusing on the impact of only one.

DIFFERENCE BETWEEN POSITIVE AND NOMINATIVE ECONOMICS

Positive economics clearly describes economic issues while Nominative economics provides solution for economic issues based on value

In positive economics statements can be tested using scientific methods while in nominative economics statements can’t be tested

Positive economic works on objectives while Nominative works on subjectives

CETERIS PARIBUS

Ceteris paribus is a latin words that means “with every other thing being unchanged or constant” it is used in economics to rule out the possibility of other factors changing
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1). Difference between positive and normative economics
As it is known positive statement in economics are based on economic phenomenon that can be tested or proven true or false while normative statements are based on ones idea or believe that cannot be tested or proven.
positive economics describe different economic phenomenon while normative provide solution to economic issues based on value.
positive economics relies on the past and present data for determining future situation while normative deals in fairness and value of economic principle
positive economics discusses cause and effect relationship while normative discuses opinion and judgement
positive economics is factual and descriptive in nature while normative is prescriptive in nature
positive economics uses data and facts for assessment while normative makes use of assumption based on ones opinion
positive argument are objective while normative argument are subjective

2). Ceteris paribus an economic term where all other variables are kept constant. examples include
Interest rate
Minimum wage
High taxes
Interest rate: when the interest rate increases ceteris paribus demand for debt goes down as the cost of borrowing increases, for instance if there be an increase in the wages of labourers the debt decreases while cost of borrowing will certainly increase and vise versa
Minimum wages: for instance if the wages of labourers increase the demand for such workers will instantly decrease and vise versa
Higher taxes: if the government taxes people more it receives more money. for instance if the rate of income tax goes from 60 percent to 75 percent the government should bring in more money and vise versa

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1. Positive Economics is the study of what and why an economy operates as it does. It is also known as Descriptive economics and is based on facts which can be subjected to scientific analysis in order for them to be accepted.
It is based on factual information and uses statistical data, and scientific formula in determining how an economy should be. It deals with the relationship between cause and effect and can be tested.

Normative Economics is the study of how the economy should be. It is also known as Policy economics wherein normative statements like opinions and judgments are used. It determines the ideal economy by discussion of ideas and judgments.
In normative economics, people state their opinions and judgments without considering the facts. They make distinctions between good and bad policies and the right and wrong courses of action by using their judgments.
Therefore, Positive economics is based on fact and cannot be approved or disapproved while normative economics is based on value judgements.

Ceteris paribus, literally “holding other things constant,” is a Latin phrase that is commonly translated into English as “all else being equal.” It acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same (constant). The use of ceteris paribus allows all other factors to remain constant, focusing on the impact of only one.
Examples:
1. If the price of bread increases, people will buy less bread.
2. When the minimum wage increase (ceteris paribus), demand for such workers will decrease. The logic is that employers will have to pay their employees more, so will hire fewer of them.

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Difference between Positive Economics and Normative economics

1. Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on personal opinions, values, and judgment.
2. Positive economics is descriptive, but normative economics is prescriptive. Positive describes what or the situation of the economy at that point in time while Normative economics postulates or prescribed solutions to the problem of the economy.
3.Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments. Normative Economics suggests how the economy ought to operate. It is also known as policy economics, as it takes into account individual opinions and preferences. Hence, the statements can neither be proven right nor wrong.
4. The perspective of positive economics is objective while normative economics have a subjective perspective.
5. Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6. The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7. Positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
Concept of Ceteris Paribus
Ceteris paribus is the commonly used Latin phrase meaning ‘all other things remaining constant.’ When using ceteris paribus in economics, it is often safe to assume that all other variables, except those under immediate consideration, are held constant.
In the real world, it’s usually hard to isolate all the different variables that may influence or change the outcome of what you are studying and how an individual might make a decision. It’s used in economics to rule out the possibility of other factors changing, which may have an impact on the outcome or decision-making process of individuals.
Example,In the supply chain, when considering how an item may move throughout the supply chain process, economists may make claims on outcomes assuming all other variables are constant. For example, ceteris paribus, higher raw material prices will decrease manufacturing supply if companies don’t increase their production budgets. This claim does not consider labor hours, packaging, or delivery, e.t.c Most, though not all, economists rely on ceteris paribus to build and test economic models. In simple language, it means the economist can hold all variables in the model constant and tinker with them one at a time. Ceteris paribus has its limitations, especially when such arguments are layered on top of one another. Nevertheless, it is an important and useful way to describeuals.

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QUESTIONS
1. Clearly discuss and analyze the differences between normative economics and positive economics.

2. Lucidly discuss and analyze the concept of ceteris paribus with partical examples.

ANSWER
1. Normative economics is a perspective on economics that reflects normative or idelogically perspective judgment towards economic development, investment project, statement and senrios.

2. Positive economics refers to the objective analysis in the study of economics. Most look at what has happened and what is currently happening in any given economy to form their bases of productions for the future. Positive economic statement are those assumption that one can easily confirmed false.

DIFFERENCES BETWEEN NORMATIVE ECONOMICS AND POSITIVE ECONOMICS
1. Normative economics are based on theory and opinion reflect a view point of how things should work or how it should happen . Normative statements are derived from the economist personal view point and stick to a strict structure that portrays an opinionated tone. While positive analysis focus solely on fact’s where as normative statements also admit opinions and feelings. While it might seem the obvious branch to rely on would be positive, most economist debate revolves around normative.

2. Positive economics system is based on fact’s, data available at the present time and can be proven true or false. A normative economic statement is based on opinions and theory and cannot be proven true or false
*”Health is a good life time investment”are positive statement because we can confirm them.

2. Lucidly discuss and analyze the concept of ceteris paribus with partical examples
To understand the law of demand,the law of supply and many other important economic concept the best you understand the term ceteris paribus. It is a commonly used Latin phase meaning ‘all other things remaing contest.

IT’S IMPORTANCE
1. It’s concept economics because in the different variables that may influence or change the outcome of what your studying and how and individual might make a decision example we say that the increase in the price of tomatoes will lead to less demand. Application include demand and supply

Ceteris Paribus
To understand the law of demand, the law of supply, and many other important economic concepts, it’s important that you first understand the term ceteris paribus. Ceteris paribus is the commonly used Latin phrase meaning ‘all other things remaining constant.’ When using ceteris paribus in economics, it is often safe to assume that all other variables, except those under immediate consideration, are held constant.
Why Is It Important in Economics?
The concept of ceteris paribus is important in economics because, in the real world, it’s usually hard to isolate all the different variables that may influence or change the outcome of what you are studying and how an individual might make a decision. It’s used in economics to rule out the possibility of other factors changing, which may have an impact on the outcome or decision-making process of individuals.

For example, in economics, we may say that an increase in the price of beef will decrease the quantity demanded for beef. We often add the phrase or assume, ‘all else constant,’ at the end. Why, you might ask? We know from the law of demand that if the price of beef goes up, less beef will be demanded, all else constant. Now assume we take away the phrase, ‘all else constant.’ It now becomes extremely difficult to study the relationship between price and quantity demanded. We open up the entire world to known and unknown factors that may also affect the demand for beef.

What if the price of pork or chicken went down? Would some people buy less beef and substitute more pork and chicken? Certainly. What if a new study came out linking red meat to high rates of cancer or diabetes? Could that alone affect the demand for beef? Certainly. How about if the beef industry simply increased advertisements about the benefits of eating red meat? Could a large population increase affect the price and demand for beef? Again, the answers are: certainly!

I give you all of those other possibilities to show you that if you don’t include or assume the phrase, ‘all else constant,’ in economics, it can be almost impossible to identify the true effect of one variable on another. Or, in this case, the simple relationship between a price change for beef and the corresponding change in quantity demanded for beef.

In the real world, it may be a combination of several things affecting the demand for beef. But to understand the influence of each one of those factors on price or quantity demanded, we must ignore all the other possibilities. It’s only then that we can see how each variable affects the other without interference of other outside forces.

Examples of Ceteris Paribus
Let’s look at a few examples to really drive home the importance of ceteris paribus, ‘all else constant.’
1)Say over a period of five years, the price of automobiles rises and so does the number of vehicles sold. That seems to violate the law of demand. The law of demand would have us believe that if the price of automobiles rose, the number of vehicles sold should have decreased.
2) Ceteris paribus stipulates that if other factors remain the same, a decrease in the supply of bread will cause prices to rise.The law of supply and demand: In the law of demand, buyers demand less of an economic good when prices are higher.

Normative economic analysis refers to the analysis in which we study whether a particular mechanism is desirable or not. In this analysis, we study what ought to be the desired situation or in what ways the economic problems should be solved .Normative economics is a perspective on economics that reflects normative, or ideologically prescriptive judgments toward economic development, investment projects, statements, and scenarios.lies on objective data analysis, normative economics heavily concerns itself with value judgments and statements of “what ought to be” rather than facts based on cause-and-effect statements. It expresses ideological judgments about what may result in economic activity if public policy changes are made. Normative economic statements can’t be verified or tested.

Positive economics is the objective analysis of the economic study. This involves investigating what’s happened versus what is happening, allowing economists to predict what will happen in the future. Positive economics is tangible, so anything that can be substantiated with a fact, such as the inflation rate, the unemployment rate, housing market statistics, and consumer spending are examples of positive economics.
Difference between normative and positive economic.
Normative economics aims to determine what should happen or what ought to be.
While positive economics describe economic programs, situations, and conditions as they exist, normative economics aims to prescribe solutions.
Normative economics expresses ideological judgments about what may result in economic activity if public policy changes are made.While positive economics is a branch of economics that relies on objective data, normative economics is based on subjective information. The latter is based on value judgments that stem from opinions and personal feelings rather than analysis. Positive economics deals in what is compared to normative economics, which relies on what economic behavior should be.

Differences Between Positive and Normative Economics

Their detailed differences are as follows:

1. Positivist statements are descriptive, clearly measurable and precise. The statements can be measured against tangible evidence or historical instances and there are no instances of approval-disapproval in positive economics due to the presence of different viewpoints.

On the other hand, Normative economics is subjective, value-based, and originating from personal perspectives, and viewpoints on decision making. They are rigid and prescriptive in nature, sound authoritarian, and seek “what should be” or “what ought to be.”

2. The perspective of the positive economics is objective while the normative economics attacks from a subjective perspective: The positive economy is objective in nature as it is fact-based. It’s statements are measurable, can be proved and accessed while normative economics is subjective and steems from the feelings of the individuals when making their decisions.

The normative economics perspective is based on the subjective point of view. It details the thoughts and perceptions of the individual and from there generates ideas.

3. Positive economics is scientific in nature while normative economics cannot be scientifically proven: The approach of positive economics is scientific and calculated on a particular economic issue.

The statement of the positive economist is recorded to make a conclusion. The statements of a positive economist can be tested and proved by comparing it with previous statements or with other records. The statements of a positive economist can be proved and disproved.

Normative economics on the other hand cannot be provided scientifically, but also provides the same solutions that are based on the personal motives, values and judgement of the individual. The statements of normative economics cannot be proved or disproved.

4. Positive economics is more calculated in it’s approach as it provides a scientific and calculated analysis of an issue, while normative economics provides such solutions but they are based on personal values: Every statement of an econcomist seeks to reach a conclusion, but they both have their methods of doing this.

The positivist method can be proved and tested by comparing it to previous statements or records of other economist. Such that, the statements of positive econcomists seek to consider what is actually happening in a country, it helps policymakers to decide whether their proposed action will be able to fulfill our objectives or not, and based on whether they are useful or not, they are then accepted or rejected.

Normative economists on the other hand cannot be proved and tested comparing it to previous statements. The statement of a normative economist seeks to consider what is happening within the individual, which is the subjective perspective of the economists.

5. The positive economists seeks to know ‘what is’; while normative economists seeks to know ‘what should be’: The positive economists relies on factual approach, which is also known as what is. The positive economist uses fact that has been postulated, facts that are genuine and ones that have worked either in a nation’s economy or in the general world.

The normative economists, however, base their approach on things that are yet to be, and what should be. They base their assertions on the internal perspective of the individual. They rely on personal approach rather than data that has been calculated over time.
Ceteris paribus

Latin expression for “other things being equal.” The term is used in economic analysis when the analyst wants to focus on explaining the effect of changes in one (independent) variable on changes in another (dependent) variable without having to worry about the possible offsetting effects of still other independent variables on the dependent variable under examination. For example, “an increase in the price of beef will result, ceteris paribus, in less beef being sold to consumers.” Putting aside the possibility that the prices of chicken, pork, fish and lamb simultaneously increased by even larger percentages, or that consumer incomes have also jumped sharply, or that CBS News has just announced that beef prevents AIDS, etc. an increase in the price of beef will result in less beef being sold to consumers.

1. positive economics are statements about economics which can be justified to be correct or not by prove, normative economics is subjective and statements which cannot be supported or disclaimed.

2. The concept of ceteris paribus comes in play in the relationship between price and quantity demand, stating that if all things being equal when the price of a good increases the quantity demand decreases and when the price of a good decreases the quantity demand increases.

Discuss and analyse differences between normative and positive economics
Normative economics is a concept in economics addressing the issues and topics related to the economy in the presence of sense of judgement that is to say that it is inherently subjective.
Positive economics is a concept in economics addressing the issues and topics related to the economy in the absence of sense of judgement solely based on facts.

Differences between normative and positive economics
Positive economics: talks about facts and existing things.
Normative economics:talks about fictional and non existing things

Positive economics:Facts can be verified.
Normative economics:No facts but economic opinion that is hypothetical.

Positive economics:You can’t test,prove or disprove it.
Normative economics:You can’t test nor prove anything

Lucidly discuss and analyse the concept of ceteris paribus with practical examples
Ceteris paribus is a latin term meaning all else are equal.It is a concept in which all external factors acting on a variable are unchanged or constant in the testing process of its relationship with other variables.
It can also be seen as a concept that inculcates the use of probability and tendency knowledge in measuring the cause and effect in a relationship between two economic variables

Practical examples of ceteris paribus
If the price of a mobile phone for eg Iphone manufactured by apple company decreases,it is assumed that the demand will increase more.If a 50 percent discount on the base price is discovered by a user,he or she will purchase more than one.

Presently,the cost of drinking water in Nigeria has risen to 250 in the country’s currency.Nevertheless,people buy it at the same rate they buy before at at a considerably low price.The regular demand supply is still met despite the increase in price.This is owing to the influencing factor of high utility rendered by water to the citizens

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Clearly discuss and analyse the differences between between normative economics and positive economics.
Positive Economics is a branch of economics that has an objective approach, based on facts. It analyses and explains the casual relationship between variables. It explains people about how the economy of the country operates. It is alternatively known as pure or descriptive economics.
Positive Economics is when the scientific methods are applied to economic phenomena and scarcity related issues. Statements based on positive economics considers what’s actually occurring in the economy. It helps the policy makers to decide whether the proposed action, will be able to fulfill our objectives or not. In this way, they may accept or reject the statements.

Normative economics is the economics that uses value judgments, opinions, beliefs. This branch of economics considers values and results in statement that state, “what should be the things”. It incorporates subjective analyses and focuses on theoretical situations.
Normative economics also known as policy economics, Suggest how the economy ought to operate as it takes into account individual opinions and preferences. Hence, the statements can neither be proven right nor wrong.
Difference.
Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
The perspective of positive economics is objective while normative economics have a subjective perspective.
Positive Economics explains ‘what is’ where as normative economics explains ‘what should be’.

Discuss and analyse the concept of Ceteris Paribus in Economics with practical example.
Ceteris Paribus is a Latin phrase that means “all other things being equal”. Experts use it to explain the theory behind laws of economics and nature. It means that something else most of the time, if nothing else changes. It facilitates the study of causative effects among segregated variables.
The Ceteris Paribus methodology can’t predict absolutes or certainties, but it offers a base knowledge of tendencies or probabilities . Economists may opt to simplify the economic mechanism to explain economic behavior, isolating two or more variables while all others are assumed as Constant, unchanging, or in the state of Ceteris Paribus.
Examples
Here is a Ceteris Paribus example to understand the concept better.
When the price of a certain mobile phone, for example, iPhone manufactured by Apple inc, decreases, it is assumed that its demand will increase more in the market. So, if a customer goes to an Apple Store and finds that iPhones have 50% off on their base price, then one may buy more than one iPhone.
However, the above Ceteris Paribus assumption does not consider whether everyone can afford iPhone even at a lower price, whether everyone likes iPhones and whether everyone has the actual need for a new iPhone in their lives.
In thesame way, economists predict that if the price of pizza increases, other variables remain constant and buyers will demand a lesser quantity of pizza. Here, if we consider some unknown factors like if the buyers like to consume pizza and if it gives them a high utility, then they will not give up on the consumption even if prices increase.
Thus, Ceteris Paribus is a simple tool to assess the relation between demand and supply but only when other factors remain constant

Positive economic is the type of economics that one apply to it daily activities and it brings good result,this kind of economics help one to no how to use things,like resources,raw material and most importantly finance, without having a primary knowledge,u can’t run a business or manager
er a big organization that brings money
2 normative economics as it name implies is using ur natural wisdom to run daily activities or big business venture

MEANING OF POSITIVE AND NORMATIVE ECONOMICS (CETERIS BARIBUS).

Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness.
In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.Well, this was only a preface about the entire discussion. We will look forward to discussing ‘What is Positive and Normative Economics?’,

What is Positive Economics?
Positive economics is the stream of economics that has an objective approach, relied on facts. It concentrates on the description, quantification, and clarification of economic developments, prospects, and allied matters. This subdivision of economics relies on objective data analysis and relevant facts and figures. Therefore, it tries to establish a cause-and-effect relationship or behavioral relationship that can help determine as well as test the advancement of economic theories.
Here, the study of economics is more objective and focuses more on facts. Moreover, the statements are precise, descriptive, and measurable. Such reports can be quantified with respect to noticeable evidence and historical references.A positive economics example is a statement, “Government-funded healthcare surges public expenditures.” This statement is based on facts and has a considerable value judgment involved in it. Therefore, its credibility can be proven or dis-proven via a study of the government’s involvement in healthcare.

What is Normative Economics?
Normative economics deals with prospective or theoretical situations. This division of economics has a more subjective approach. It focuses on the ideological, perspective-based, opinion-oriented statements towards economic activities. The aim here is to summarise the desirability quotient among individuals and quote factors like ‘what can happen’ or ‘what ought to be’.Normative economics statements are subjective and rely heavily on values originating from an individual opinion. These statements are often very rigid and perceptive. Therefore, they are considered political or authoritarian. A normative economics example is, “The government should make available fundamental healthcare to every citizen”. You can understand that this statement is based on personal perspective and satisfies the need for ‘should be’ or ‘ought to be’.

Difference Between Positive and Normative Economics
Positive and Normative Economics do have some underlying differences between them. We will analyze the differences between them in terms of meaning, perspective, function, area of study, testing, economical clarification.

MEANING:Positive economics means more focus on data, facts, and figures rather than personal perspectives. The statements here are to the point and supported by relevant information. On the other hand, normative economics focuses more on personal perspectives and opinions rather than facts and figures. Here the statements are based on an individual’s point of view, and ample data is always available to support such claims.

PERSPECTIVE:The perspective of these two concepts is a significant point of difference between them. Positive economics is objective, whereas normative economics is subjective. The focus of positive economics is on presenting relevant and more focused statements backed by actual data.Contrarily, normative economics focuses on presenting statements that may or may not be possible in the future. Moreover, in some cases, such statements do not have any credible data to back them up.

FUNCTION:Their functions can distinguish between positive and normative economics. Positive economics describes the cause and outcome of the relationship among variables. On the other hand, normative economics provides value judgment.

AREA OF STUDY: Positive economics is the study of ‘what is’; whereas normative economics describes ‘what should be’. One branch relies on a factual approach supported by data. Contrarily, normative economics relies more on personal opinions rather than actual data.

TESTING:Every statement of positive economics can be tested scientifically and either proven or disregarded. However, normative economics statements cannot be tested scientifically. It entirely depends on the belief of an individual.

ECONOMICAL CLARIFICATION:Positive economics provides a more scientific and calculated clarification on an economic issue. However, normative economics also provides such solutions but ones that are based on personal values.

EXAMPLES OF POSITIVE ECONOMICS

1)The desired rate of return on gambling stocks are higher compared to others
2)The relationship between wealth and demand is inverse in the case of inferior goods
3)House prices reduce once the interest rate on loans get higher
4)Car scrappage schemes can result in a fall in the prices of second-hand cars

Examples of Normative Economics –
1)The government should implement strict wealth tax laws to decrease the uneven distribution of wealth.
2)No individuals should be entitled to inheritances as it belongs to society.
3)Import duties should be increased on goods coming from nations with humble human rights record
4)Investors ought to be more socially responsible and stop investing in vice versa
5)Developing countries should only accept democracy when their entire population is educated and liberated

IMPORTANCE OF POSITIVE AND NORMATIVE TYPES OFECONOMICS
Even though normative economics is a subjective study, it acts as a base or a platform for out-of-the-box thinking. These concepts will provide a basic foundation for the innovative ideas that will ignite to reform an economy.However, all the decisions cannot rely on them altogether. On the other hand.
Positive economics is needed to provide an objective approach. Positive economics is focused on the facts and analyses of the effects of such decisions in society and thereby it helps by providing a statement that comprises the necessary information to make a sound economic decision. Normative economics is thus useful in creating and generating newer ideas from another or different perspectives, also note it cannot be the only basis for making decisions on important economic issues, and here the positive economics come into action thus complementing each other.
So, Positive economic theory can help the economic policymakers to implement the normative value judgments. Like – it can describe how the government is in power to impact inflation by printing more money or restructuring the banking reforms, this economics can support that statement with strong facts and analysis with relationships between inflation and growth in the money supply of an economy.

Discuss and analyse the differences Discuss and analyse the differences between normative and positive economics
Normative economics is a branch of economics incorporating subjective approach of analysis based on value judgements,opinions and beliefs in statents stating “what should be the things” that focuses on theoretical solutions. It considers individual opinions and preferences hence statements can neither be proven right or wrong.It is also known as policy economics
Positive economics is a branch of economics incorporating objective approach of analysis based on facts explaining casual relationship between variables.Statements related to the occurances in the economy are considered thereby helping policy makers decide whether the proposed action will fulfill the objectives. Acceptance and rejection of statements is permitted

Differences between normative and positive economics

Normative Positive economics
Economics
Based on opinions, Based on data and
judgements and facts
Values

Prescriptive in descriptive in
nature. nature

Subjective. Objective

What ought to. What actually is
be

No Scientific scientific testing
testing Of of statements
statements.

Discuss and analyse the concept of ceteris paribus in economics with practical examples
Ceteris paribus is a latin word meaning “other things being equal”.In regards to economics,it means the state in which influencing factors or variables are constant or equal OR all other factors not being considered or considered to be constant.
For eg:
According to ceteris paribus,if coca cola falls its demand will increase.Pepsi may react and change their prices as well.In other words it means the demand remains unchanged. Alternatively Coca cola may have to compromise the quality of their ingredients to reduce their prices leading to a decline in demand over long term.
Also,If United States drill more oil domestically there would be more
supply of gasoline hence dropping the price of gas
It is known as natural law.There is no law that defines that it would happen.Its simply an assumed outcome based on how variables interact or flow together

normative and positive economics
Normative economics is a branch of economics incorporating subjective approach of analysis based on value judgements,opinions and beliefs in statents stating “what should be the things” that focuses on theoretical solutions. It considers individual opinions and preferences hence statements can neither be proven right or wrong.It is also known as policy economics
Positive economics is a branch of economics incorporating objective approach of analysis based on facts explaining casual relationship between variables.Statements related to the occurances in the economy are considered thereby helping policy makers decide whether the proposed action will fulfill the objectives. Acceptance and rejection of statements is permitted

Differences between normative and positive economics

Normative Positive economics
Economics
Based on opinions, Based on data and
judgements and facts
Values

Prescriptive in descriptive in
nature. nature

Subjective. Objective

What ought to. What actually is
be

No Scientific scientific testing
testing Of of statements
statements.

Discuss and analyse the concept of ceteris paribus in economics with practical examples
Ceteris paribus is a latin word meaning “other things being equal”.In regards to economics,it means the state in which influencing factors or variables are constant or equal OR all other factors not being considered or considered to be constant.
For eg:
According to ceteris paribus,if coca cola falls its demand will increase.Pepsi may react and change their prices as well.In other words it means the demand remains unchanged. Alternatively Coca cola may have to compromise the quality of their ingredients to reduce their prices leading to a decline in demand over long term.
Also,If United States drill more oil domestically there would be more
supply of gasoline hence dropping the price of gas
It is known as natural law.There is no law that defines that it would happen.Its simply an assumed outcome based on how variables interact or flow together

Discuss and analyse the differences between normative and positive economics
Normative economics is a concept in economics addresing issues and topics related to the economy in the presence of sense of judgement that is to say that it is inherently subjective
Positive economics is a concept in economics addressing the issues and topics in absence of sense of judgement solely based on facts that is to say that it is objective in regards 5o the method of approach

Positive economics Normative
economics
Talks about existing Talks about
things. fictional things

Facts can be verified. No facts but
economic opinion
You can test,prove You can’t test nor
or disprove it prove

Discuss and analyse the concept of ceteris paribus with practical examples
Ceteris paribus is a latin term meaning “all else are equal”.Ceteris paribus is a concept in which
the external factors acting on a variable are said to be in unchanged or constant in the testing process of its relationship with other variables OR a concept that inculcates the use of probability and tendency knowledge to measure the cause and effect in a relationship between two economic variables.

Practical examples of ceteris paribus

When the price of a mobile phone eg Iphone produced by apple company decreased,it is assumed that it’s demand will increase more. If a customer discovers 50 percent discount on the base price,he or she will purchase more than one from the Apple store

Currently,the cost of drinking water has risen to 250 in Nigerian currency. Nevertheless,people still buy it at the same rate they buy in the past when the price was considerably low. They still meet the same demand supply despite the increase in price due to the influencing factor of high utility rendered by the water to the consumers

1. Positive and normative economics differ in their approach towards economic situations.
Positive economics is the objective analysis of economics. It is an investigative process that helps understand what is currently happening or has happened in an economy to form the basis of predictions for the future. This part of economics relies on factual data based on which verifiable conclusions can be drawn. It talks about facts that can be either be proven or disapproved.
Normative economics on the other hand is not based on facts and is rather based on the ideological principle that expresses the conditions of the economy whenever public policy changes are made.This is a study related to what should happen instead of what is currently happening. This part of economics deals with normative statements and focuses on the idea of fairness. Since it is an opinion-based analysis, it is affected by the value judgments. In normative economics, outcomes are assessed as either good or bad. Due to the nature of this part of economics, there is no method to prove or disprove an opinion.
2. Ceteris paribus means all external factors acting on a variable subject are assumed to remain unchanged/constant while testing its relationship with other variable subjects. Economists use it for confirmation of a theory in economics. It measures the cause and effect in a relationship between two separate economic variables using probability and tendency knowledge. For example,if the researcher wants to see what will happen to the demand of a certain product if its price rises, then here the researcher might say that the demand will decrease by taking all other factors like purchaser’s income, purchaser’s taste, and preferences and so on as constant. The concept of ceteris paribus actually made these relationships simpler to understand and predict future patterns.
Another example of ceteris paribus: price, that directly impacts the connection between two variables like supply and demand. The price factor can associate multiple variables responsible for the change in demand for a commodity. Likewise, supply always increases when the demand for a product rise, provided other things like input cost, wages, and taxes remain the same. Thus, ceteris paribus comes into play, and one can say that supply falls whenever demand falls.

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Normative Economy
Normative economics aims to determine people’s desirability or the lackthereof to various economic programs, situations, and conditions by asking what should happen or what ought to be. Therefore, normative statements typically present an opinion-based analysis in terms of what is thought to be desirable. For example, stating that the government should strive for economic growth of x% or inflation of y% could be seen as normative. Behavioral economics has also been accused of being normative in the sense that cognitive psychology is used to steer (“nudge”) people to make desirable decisions by engineering their choice architecture.
As positive economics describe economic programs, situations, and conditions as they exist, normative economics aims to prescribe solutions. Normative economic statements are used to determine and recommend ways to change economic policies or to influence economic decisions.
Normative economics looks at how the economy should be or should have been rather than how it actually is or was – it suggests policies for improving economic welfare. Normative means relating to an ideal model or standard, or based on what is considered to be the correct or normal way of doing something. It is a part of economics that expresses value (normative judgments) regarding economic fairness, or what the economic outcome or goals of public policy ought to be. According to the Economist’s glossary of terms, normative economics is: “Economics that tries to change the world, by suggesting policies for increasing economic welfare. The opposite of positive economics, describe the world as it is, rather than prescribe ways to make it better.”
Positive Economics
The term positive economics refers to the objective analysis in the study of economics. Most economists look at what has happened and what is currently happening in a given economy to form their basis of predictions for the future. This investigative process is positive economics. Conversely, a normative economic study bases future predictions on value judgments.
Positive economics is an objective stream of economics that relies on facts or what is happening. Conclusions drawn from positive economics analyses can be tested and backed up by data. Positive economic theory does not provide advice or instruction. Statements based on normative economics include value judgments or what should be in the future. Positive economics and normative economics can work hand in hand when developing policy.
Normative economics contrasts with positive economics, which aims to describe the economic world as it really is, instead of trying to prescribe ways to improve it. The normative economist tries to determine the desirability-undesirability of various economic conditions, situations or programs by asking the question: “What ought to or should be/have been?” The positive economist asks: “What is/was/has been?” While positive economics gathers and analyzes real data – about things that happen or have happened – normative economics relies heavily on value judgments and theoretical scenarios that present subjective results, i.e. how things should be or should have been. Normative economics tells us what things would be like or would have been like if public policy were or had been different.
Ceteris Paribus
A dominant assumption in mainstream economic thinking, it acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same (constant). In the scientific sense, if we claim that one variable influences another, ceteris paribus, we are essentially controlling for the effects of some other variables.,
In the fields of economics and finance, ceteris paribus is often used when making arguments about cause and effect. An economist might say raising the minimum wage increases unemployment, increasing the supply of money causes inflation, reducing marginal costs boosts economic profits for a company, or establishing rent control laws in a city causes the supply of available housing to decrease.
Ceteris paribus assumptions help transform an otherwise deductive social science into a methodologically positive “hard” science. It creates an imaginary system of rules and conditions from which economists can pursue a specific end. Put another way; it helps the economist circumvent human nature and the problems of limited knowledge. Most, though not all, economists rely on ceteris paribus to build and test economic models. In simple language, it means the economist can hold all variables in the model constant and tinker with them one at a time. Ceteris paribus has its limitations, especially when such arguments are layered on top of one another. Nevertheless, it is an important and useful way to describe relative tendencies in markets.
Application of ceteris paribus
Supply and Demand
As an example, take the laws of supply and demand. Economists say the law of demand demonstrates that ceteris paribus, more goods tend to be purchased at lower prices. Or that, if demand for any given product exceeds the product’s supply, ceteris paribus, prices will likely rise. In this situation, the price of an item is the only variable that should change. All else should remain ceteris paribus. If only the price were to change, we can appropriately forecast the outcome because of the laws of supply and demand.

Supply Chain
There are a tremendous amount of factors that go into a unit’s production. This includes delivery of raw materials, labor hours, equipment availability, ingredient pricing, packing and delivery, or distribution. Therefore, when considering how an item may move throughout the supply chain process, economists may make claims on outcomes assuming all other variables are constant. For example, ceteris paribus, higher raw material prices will decrease manufacturing supply if companies don’t increase their production budgets. This claim does not consider labor hours, packaging, or delivery.

Positive economics is a branch of economics that has an objective approach based on facts. It analyses and explains the casual relationship between variables. When the scientific methods are applied to economic phenomena and scarcity related issues, it is positive economics. Statements based on positive economics considers what’s actually occurring in the economy.
On the other hand, the economics that uses value judgement, opinions, belief is called normative economics. This branch of economics considers values and results in statements that states, ‘what should be the things’. It incorporates subjective analysis and focuses on theoretical situations. Normative economics suggests how the economy ought to operate. It takes into account individual opinions and preferences.
In summary, positive economics refers to a science which is based on data and facts while normative economics is a science based on opinions, values and judgement. Positive economics is descriptive but normative economics is prescriptive.

CETERIS PARIBUS

The concept of ceteris paribus is important in economics because, in the real world, it’s usually hard to isolate all the different variables that may influence or change the outcome of what you are studying and how an individual might make a decision. It’s used in economics to rule out the possibility of other factors changing which may have an impact on the outcome or decision-making process of individuals.
E.g= say over a period of five years, the price of automobiles rises and so does the number of vehicles sold. That seems to violate the law of demand. The law of demand would have us believe that if the price of automobiles rose, the number of vehicles sold should have decreased.

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Normative and positive economics are known as the two arms of economics.Positive economics describes and explains various economic phenomena.while normative economics does not.
Positive economics makes use of data,facts and figures while normative does not.

Normative economics is subjective while positive economics is objective.
Normative economics focuses more on personal perspectives and opinions,that is how economics should or ought to be.

Ceteris paribus which we all know “all things being equal” is a Latin word ,because we may have come across it in one way or the other,in our primary schools which is home economics,and in our secondary schools as economics.
In economics it is used in the law of supply which States that,the higher the price the higher the quantity supplied, but the lower price the lower the quantity supplied “all things being equal” and also applied in the law of demand.

Difference Between Positive and Normative Economics
Positive economics is entirely based on facts which means it explains topics and issues related to the economy without judging them. At the same time, normative economics is merely based on values. Moreover, it is inherently subjective, which means it does not just explain issues and topics concerned with economics but also judges them.

Economics is both science and art. And it is not only limited to fact or fiction. It is a combination of both.WallStreetMojo
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Positive vs Normative Economics

Normative Economics
Positive economics is entirely based on facts which means it explains topics and issues related to the economy without judging them. At the same time, normative economics is merely based on values. Moreover, it is inherently subjective, which means it does not just explain issues and topics concerned with economics but also judges them.
Positive economics talks about things that exist. They are facts that can be verifiable. You can prove it or disprove it. You can test it and find out whether these statements mentioned under positive economics
are true or untrue.
But normative economics is fiction. They aren’t facts; rather, they are economists’ opinions who tell us what they think. It can be true for some and false for some. And these statements mentioned under normative economics
aren’t verifiable. They can’t be tested
Question 2;
All things being equal, if the price of milk increases, people will buy less milk. This assumption ignores how other substitutes are behaving, how household income is behaving, or non-economic factors such as the health benefits of milk. Ceteris paribus, people will buy less of a product if the price is higher.
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*Differences between normative economics and positive economics*
Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness. In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.
The differences between positive and normative economics are explained in the points given below:
1).Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.
2).Positive economics is descriptive, but normative economics is prescriptive.
3).Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
4).The perspective of positive economics is objective while normative economics have a subjective perspective.
5).Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6).The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7).positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
* Lucidly discuss and analyse the concept of ceteris paribus in economics with example*
Ceteris paribus a Latin phrase, meaning “other things equal”; some other English translations of the phrase are “all other things being equal”, “other things held constant”, “all else unchanged”, and “all else being equal”. A statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors.
Economics’ ceteris paribus conditions include:
1) .The number of consumers in the market
2) .Consumer tastes or preferences
3) .prices of substitute goods
4) .consumer price expectations
5). Personal income
One of the disciplines in which ceteris paribus clauses are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes. When using ceteris paribus in economics, one assumes that all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases—ceteris paribus—the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good.
This operational description intentionally ignores both known and unknown factors that may also influence the relationship between price and quantity demanded, and thus to assume ceteris paribus is to assume away any interference with the given example. Such factors that would be intentionally ignored include: a change in the price of substitute goods, (e.g., the price of pork or lamb); a change in the level of risk aversion among buyers (e.g., due to an increase in the fear of mad cow disease); and a change in the level of overall demand for a good regardless of its current price (e.g., a societal shift toward vegetarianism).
example in economics is “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

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Normative or welfare economics deals with what ought to be rather than what is and contains prescriptive statements that may be based on value judgement. Having a belief that the income should be distributed evenly in the economy is an example of normative economics.
Positive economics on the other hand deals with what is, rather than what ought to be. It involves descriptive statements that are objective and verifiable. There is presence of a theory with proven facts and figures that needs to be taken into account before developing the theory. Law of demand is an example of positive economics.

The Latin term ceteris paribus means “all else being equal” in English. This means that single variables are studied to determine their affects on other variables in the consideration that nothing else changes in an effort to identify causal factors. By holding all variables constant, economists are able to experiment with each variable independently to observe how, and to what extent they influence one another. These relative tendencies can then be used to generate assumptions about what can be expected in the future, assuming nothing unforeseen occurs (ceteris paribus). Ceteris paribus is used in economical discussions to show that a change in a variable being observed is in the consideration that nothing else has changed. An example of expressing this in economics would be: If the price of cement increases, ceteris paribus, demand for buildings will decrease and if the price of fuel increases, ceteris paribus, then, the demand for cars will decrease

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1. Concepts and difference between positive and normative economics.
Positive economics is related to the analysis which is limited to cause and effect relationship. On the other hand, normative economics aims at examining real economic events from the moral and ethical point of view. It is used to judge whether the economic events are desirable or not.
While positive economics is based on facts on the economy, normative economics is value judgement based.
Most of the people think that the statements which are commonly affected are a fact but in reality, they are valued.

2. Concept and examples of Ceteris Paribus.
Ceteris paribus means “all other things being equal” in Latin. This concept can be used both to explain natural or scientific laws, as well as economic theories. For example, imagine that you’re testing the law of gravity. If you throw an apple from the top of a tree it will fall to the ground, provided there are no changes to normal circumstances or “ceteris paribus.”

However, what if a freak storm is passing through and a tornado picks up the apple? It might not fall to the ground, but this doesn’t mean it defies the law of gravity. Instead, it’s an example of things not being equal, or outside the norm.
The ceteris paribus meaning in economics is concerned more with the effect of one variable on another. Economics involves numerous fluctuations according to outside influences, which is why the concept of ceteris paribus makes it easier to craft laws. If you can imagine a situation where there are only two variables, all other factors or fluctuations not included, you can more accurately consider cause and effect.

In this way, ceteris paribus offers economists a way to build and test their models, barring extraneous variables. The concept creates an instant system of conditions, keeping out the fluctuations that make economic modelling difficult.

Ceteris paribus examples
One example of ceteris paribus would be the economic law of supply. According to this law, an increase in price results in an increase in quantity supplied, when keeping others factors constant or ceteris paribus.

Using ceteris paribus, economists can focus solely on the two factors involved: price and supply. When producers are paid higher prices for a product, they will be willing to offer more of the product for sale by increasing production. While the real world is never as simple as this, the idea of ceteris paribus allows economists to look at the theoretical relationship between price and supply.

A secondary example could be an explanation of the cost of eggs. In the real world, there’s a multitude of factors that would influence this cost, including the availability and health of chickens, the property values of farmland, the growing popularity of veganism reducing demand, or the level of currency inflation. To keep it simple and look solely at supply vs. cost, an economist could apply ceteris paribus. With all other factors constant, a reduction in the supply of egg-laying hens would cause egg prices to rise.

Additional examples might include two-factor relationships between:

Currency supply and inflation

Interest rates and GDP

Minimum wage and unemployment

Rent control and housing supply.

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Positive Economics is a system of economics that is based on objective, factual information that can be proven true or false by using a scientific approach. It can be used as a reliable source for decision-making purposes for a business or government authority. To be proven true or false, positive economics can be tested to validate whether its claims are correct. The scientific approach is used for positive economics to establish a cause and effect relationship. To do so, one must perform a scientific experiment in the form of research that proves the statements that positive economics is establishing.
Normative Economics are in contrast to positive economics because they based not on facts, but on someone’s opinion or recommendation. A scientific approach cannot be taken to prove normative economics, since it is based on subjective information that changes from person to person. The main difference between normative and positive economics is that normative economics is created by biased opinions of an individual, while positive economics is based on unbiased findings that, when proven, are universally accepted and cannot be denied. These two separate divisions of economics have different purposes, but should be used in conjunction with each other.
Ceteris peribius; all things being equal Suppose that you wanted to explain the price of milk. With a little thought, it becomes apparent that milk costs are influenced by numerous things: the availability of cows, their health, the costs of feeding cows, the amount of useful land, the costs of possible milk substitutes, the number of milk suppliers, the level of inflation in the economy, consumer preferences, transportation, and many other variables. So an economist instead applies ceteris paribus, which essentially says if all other factors remain constant, a reduction in the supply of milk-producing cows, for example, causes the price of milk to rise.

ANSWERS
1. Positive economics is a stream of economics that focuses on the description, quantification, and explanation of economic developments, expectations, and associated phenomena. It relies on objective data analysis, relevant facts, and associated figures. It attempts to establish any cause-and-effect relationships or behavioral associations which can help ascertain and test the development of economic theories.

Normative economics focuses on value-based judgments aimed at improving economic development, investment projects, and the distribution of wealth. Its goal is to summarize the desirability (or lack thereof) of various economic developments, situations, and programs by asking what should happen or what ought to be.
Normative economics is subjective and value-based, originating from personal perspectives or opinions involved in the decision-making process. The statements of this type of economics are rigid and prescriptive in nature. They often sound political, which is why this economic branch is also called “what should be” or “what ought to be” economics.
An example of a normative economic statement is: “The government should provide basic healthcare to all citizens.” As you can deduce from this statement, it is value-based, rooted in personal perspective, and satisfies the requirement of what “should” be.

2. Ceteris paribus is a Latin phrase that generally means “all other things being equal.”
In economics, it acts as a shorthand indication of the effect one economic variable has on another, provided all other variables remain the same.
Many economists rely on ceteris paribus to describe relative tendencies in markets and to build and test economic models.
The difficulty with ceteris paribus is the challenge of holding all other variables constant in an effort to isolate what is driving change.
In reality, one can never assume “all other things being equal.”

1. Normative Economics is the that economics uses value judgments, opinions, beliefs.This branch of economics considers values and results in statements that state, ‘what should be the things’. It incorporates subjective analyses and focuses on theoretical situations. It suggests how the economy ought to operate. It is also known as policy economics, as it takes into account individual opinions and preferences. Hence, the statements can neither be proven right nor wrong.

Positive Economics is a branch of economics that has an objective approach, based on facts. It analyses and explains the casual relationship between variables. It explains people about how the economy of the country operates. Positive economics is alternatively known as pure economics or descriptive economics.
When the scientific methods are applied to economic phenomena and scarcity related issues, it is positive economics. Statements based on positive economics considers what’s actually occurring in the economy.

In comparison, normative economics is a perspective on economics that reflects ideologically prescriptive judgments toward economic development, investment projects, statements, and scenarios.
Unlike positive economics which relies on objective data analysis, normative economics heavily concerns itself with value judgments and statements of “what ought to be” rather than facts based on cause-and-effect statements. It expresses ideological judgments about what may result in economic activity if public policy changes are made. Normative economic statements can’t be verified or tested.
Normative economics aims to determine people’s desirability or the lack thereof to various economic programs, situations, and conditions by asking what should happen or what ought to be. Therefore, normative statements typically present an opinion-based analysis in terms of what is thought to be desirable.
As positive economics describe economic programs, situations, and conditions as they exist, normative economics aims to prescribe solutions. Normative economic statements are used to determine and recommend ways to change economic policies or to influence economic decisions.
Normative economics may be useful in establishing and generating new ideas from different perspectives, but it cannot be the only basis for making decisions on important economic issues, as it does not take an objective angle that focuses on facts and causes and effects.
Economic statements coming from the positive economics angle can be broken down into determinable and observable facts that can be examined and tested. Because of this characteristic, economist and analysts often practice their professions under the positive economic angle. Positive economics, being the measurable perspective, helps policymakers and other government and business authorities decide on important matters that affect particular policies under the guidance of fact-based findings.
However, policymakers, business owners, and other organizational authorities also typically look at what is desirable and what is not for their respective constituents, making normative economics an important part of the equation when deciding on important economic matters. Paired with positive economics, normative economics can branch into many opinion-based solutions that mirror how an individual or one whole community portrays particular economic projects. These kinds of views are especially important for policymakers or national leaders.

2. The Latin term “ceteris paribus” is a concept used to help explain certain economic theories. Learn more about the importance of ceteris paribus and how it’s used below. Ceteris paribus means “all other things being equal” in Latin. This concept can be used both to explain natural or scientific laws, as well as economic theories.

Examples
One example of ceteris paribus would be the economic law of supply. According to this law, an increase in price results in an increase in quantity supplied, when keeping others factors constant or ceteris paribus.
Using ceteris paribus, economists can focus solely on the two factors involved: price and supply. When producers are paid higher prices for a product, they will be willing to offer more of the product for sale by increasing production. While the real world is never as simple as this, the idea of ceteris paribus allows economists to look at the theoretical relationship between price and supply.

Further example could be an explanation of the cost of eggs. In the real world, there’s a multitude of factors that would influence this cost, including the availability and health of chickens, the property values of farmland, the growing popularity of veganism reducing demand, or the level of currency inflation. To keep it simple and look solely at supply vs. cost, an economist could apply ceteris paribus. With all other factors constant, a reduction in the supply of egg-laying hens would cause egg prices to rise.

1.Normative statements are based on opinions or ethics—what someone believes should be. Positive statements, on the other hand, are testable, even if they may not necessarily be true.
For instance, arguing for a higher minimum wage for the benefit of workers would be an example of a normative argument, in that this argument is based on subjective values. However, an assertion that higher minimum wages would lead to a higher GDP would be considered positive economics.

2.Ceteris paribus is where all other variables are kept equal. For example, if the price of Coca-Cola falls, ceteris paribus, its demand will increase. Ceteris paribus means that other factors are not considered, or are considered to remain constant.

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DIFFERENCE BETWEEN POSITIVE ECONOMICS AND NORMATIVE
Positive Economics is an objective and a stream of economics that relies on fact or whats happening and any conclusions drawn from positive economic analysis can be tested and backed up by data. for example, the prediction that more people will save money if interest rate rise, would be based on Positive Economics because past behaviors support the theory. Positive economic theory can help policy makers implement normative value judgment for example, it can describe how the government can impact inflation by printing more money ,and it can support that statement with facts and analysis of behavior relationship between inflation and growth in the money supply. While Normative Economics focuses on the value of economic fairness or what the economy should be . it is also considered the branch of economic that tries to determine the desirability of different economic programs and conditions by asking what “should ” or what “ought” to be . Normative economic is subjective and value -based, originating from personal perspective or opinion involved in decision making process. An example of a Normative economic statement is “the government should provide basic health care to all citizens” As you can deduce from the statement, it is value base,rooted in personal perspective and satisfies the requirement of what “should ” be.

Positive Economics
Positive economics is a stream of economics that focuses on the description, quantification, and explanation of economic developments, expectations, and associated phenomena. It relies on objective data analysis, relevant facts, and associated figures. It attempts to establish any cause-and-effect relationships or behavioral associations which can help ascertain and test the development of economic theories

Positive economics is objective and fact-based where the statements are precise, descriptive, and clearly measurable. These statements can be measured against tangible evidence or historical instances. There are no instances of approval-disapproval in positive economics.
Positive economics was popularized by the economist Milton Friedman, who said that economic science should o.bjectively analyze data without any bias or agenda

Normative Economics
Normative economics focuses on value-based judgments aimed at improving economic development, investment projects, and the distribution of wealth. Its goal is to summarize the desirability (or lack thereof) of various economic developments, situations, and programs by asking what should happen or what ought to be.

Normative economics is subjective and value-based, originating from personal perspectives or opinions involved in the decision-making process. The statements of this type of economics are rigid and prescriptive in nature. They often sound political, which is why this economic branch is also called “what should be” or “what ought to be” economics.

Why is Ceteris Paribus Important in Economics
Ceteris paribus is important in economics as it helps us develop some form of understanding of economic mechanisms. In other words, it allows us to form a basic understanding and principle by which we can build on.

One of the classic examples of ceteris paribus is the supply and demand curve. As prices increase (ceteris paribus), demand falls. Now we can accept this fact when all other things are equal. However, there are also other factors such as the price of substitutes, taxes, economic climate, and so on.

By applying ceteris paribus, we have a base to work from. Then we can start applying other factors and looking at the impact they would have. After all, we are only human and we do have cognitive limitations. We cannot plausibly factor in all variables.

“Ceteris paribus simplifies economic analysis by looking at the most influential variables.”
Ceteris paribus is also important because it allows economists to identify a relationship. Although there may be other variables, there may be one overwhelming factor that has a direct correlation with another. For instance, the theory of supply and demand.

Whilst there are a plethora of other variables, the most common explanation for a decline in demand is the price. In the same fashion, supply will tend to increase when demand rises. The normal supply and demand mechanisms work 95 percent of the time.

They help us explain economic actions most of the time and it’s for that reason that ceteris paribus is important. Without assuming other factors are consistent, we would not have developed a basic understanding of

Ceteris Paribus Examples
Ceteris paribus is an economic term where all other variables are kept constant. Examples include interest rates, the minimum wage, and higher taxes. When examining each of those, economists must often assume ceteris paribus in order to create some meaningful insight – due to the complexity and number of other variables.

1. Interest Rates
When the interest rate increases (ceteris paribus), demand for debt goes down, as the cost of borrowing increases.

2. Minimum Wage
When the minimum wage increase (ceteris paribus), demand for such workers will decrease. The logic is that employers will have to pay their employees more, so will hire fewer of them.2. Minimum Wage
When the minimum wage increase (ceteris paribus), demand for such workers will decrease. The logic is that employers will have to pay their employees more, so will hire fewer of them.

3. Higher Taxes
If the government taxes people more, it receives more money. For instance, if the rate of income tax goes from 20 percent to 25 percent, the government should bring in more money. This is based upon ceteris paribus, where no other variables change.

What is not considered is the impact on individuals, particularly rich individuals. They may leave the country altogether and what they contribute in taxes as well.

1) Positive economics is based on facts about the economy. They are related to the analysis which is limited to cause and effect relationship. It analyses and explains the casual relationship between variables. It explains people about how the economy of the country while Normative economics is the division of economics that has a more subjective approach and presents statements based on personal opinions. It incorporates subjective analyses and focuses on theoretical situations. It suggests how the economy ought to operate.

2) Ceteris paribus means a situation where one determinant of supply or demand changes while all other factors affecting supply and demand remain unchanged. It assumes that other influencing factors are held constant.
Eg If the price of a phone, Ceteris paribus, its demand will increase

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*Differences between normative economics and positive economics*
Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness. In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.
The differences between positive and normative economics are explained in the points given below:
1).Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.
2).Positive economics is descriptive, but normative economics is prescriptive.
3).Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
4).The perspective of positive economics is objective while normative economics have a subjective perspective.
5).Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6).The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7).positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
* Lucidly discuss and analyse the concept of ceteris paribus in economics with example*
Ceteris paribus a Latin phrase, meaning “other things equal”; some other English translations of the phrase are “all other things being equal”, “other things held constant”, “all else unchanged”, and “all else being equal”. A statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors.
Economics’ ceteris paribus conditions include:
1) .The number of consumers in the market
2) .Consumer tastes or preferences
3) .prices of substitute goods
4) .consumer price expectations
5). Personal income
One of the disciplines in which ceteris paribus clauses are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes. When using ceteris paribus in economics, one assumes that all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases—ceteris paribus—the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good.
This operational description intentionally ignores both known and unknown factors that may also influence the relationship between price and quantity demanded, and thus to assume ceteris paribus is to assume away any interference with the given example. Such factors that would be intentionally ignored include: a change in the price of substitute goods, (e.g., the price of pork or lamb); a change in the level of risk aversion among buyers (e.g., due to an increase in the fear of mad cow disease); and a change in the level of overall demand for a good regardless of its current price (e.g., a societal shift toward vegetarianism).
example in economics is “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

1

Positive economics describes and explains various economic phenomena.
positive economics is based on fact and cannot be approved or disapproved, normative economics is based on value judgments.

While

Normative economics focuses on the value of economic fairness, or what the economy “should be” or “ought to be.”
Most public policy is based on a combination of both positive and normative economics.

2

Ceteris paribus in economics is a reference to how one isolated variable may change an economic environment assuming all other variables remain the same. In economics, ceteris paribus is often highly hypothetical as national economics and macroeconomic conditions are highly intricate and complex. However, ceteris paribus is the practice of seeing how a single economic concept (i.e. inflation) can impact broader concepts.

Eg when there is inflation on price goods like pen the demand will reduce but when there is deflation in price of goods the demand will increase..

Name: Orih somtochukwu faithful. Reg number:2021/242480 department nursing
*Differences between normative economics and positive economics*
Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness. In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.
The differences between positive and normative economics are explained in the points given below:
1).Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.
2).Positive economics is descriptive, but normative economics is prescriptive.
3).Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
4).The perspective of positive economics is objective while normative economics have a subjective perspective.
5).Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6).The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7).positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
* Lucidly discuss and analyse the concept of ceteris paribus in economics with example*
Ceteris paribus a Latin phrase, meaning “other things equal”; some other English translations of the phrase are “all other things being equal”, “other things held constant”, “all else unchanged”, and “all else being equal”. A statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors.
Economics’ ceteris paribus conditions include:
1) .The number of consumers in the market
2) .Consumer tastes or preferences
3) .prices of substitute goods
4) .consumer price expectations
5). Personal income
One of the disciplines in which ceteris paribus clauses are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes. When using ceteris paribus in economics, one assumes that all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases—ceteris paribus—the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good.
This operational description intentionally ignores both known and unknown factors that may also influence the relationship between price and quantity demanded, and thus to assume ceteris paribus is to assume away any interference with the given example. Such factors that would be intentionally ignored include: a change in the price of substitute goods, (e.g., the price of pork or lamb); a change in the level of risk aversion among buyers (e.g., due to an increase in the fear of mad cow disease); and a change in the level of overall demand for a good regardless of its current price (e.g., a societal shift toward vegetarianism).
example in economics is “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

UNIVERSITY OF NIGERIA NSUKKA
NAME :Nwoye Michael Chukwunonso
REG. NUMBER :2021/242473
DEPARTMENT :Nursing
EMAIL nwoyemichael20@gmail.com

What Is Normative Economics?
Normative economics is a perspective on economics that reflects normative, or ideologically prescriptive judgments toward economic development, investment projects, statements, and scenarios.

Unlike positive economics, which relies on objective data analysis, normative economics heavily concerns itself with value judgments and statements of “what ought to be” rather than facts based on cause-and-effect statements. It expresses ideological judgments about what may result in economic activity if public policy changes are made. Normative economic statements can’t be verified or tested.
Normative economics refers to the beliefs that support the valued judgement which is better for the nation’s economic future and for social welfare. Having a belief that the income should be distributed evenly in the economy is an example of normative economics.
Normative economics predicates itself upon maximizing both an agents social and political utility, recognized as “aggregating interests”.

Subfields of normative economics include social choice theory, cooperative game theory, and mechanism design.

Some earlier technical problems posed in welfare economics and the theory of justice have been sufficiently addressed as to leave room for consideration of proposals in applied fields such as resource allocation, public policy, social indicators, and inequality and poverty measurement.
An example of a normative economic statement is as follows:

The price of milk should be $6 a gallon to give dairy farmers a higher living standard and to save the family farm.
This is a normative statement, because it reflects value judgments. This specific statement makes the judgment that farmers deserve a higher living standard and that family farms ought to be saved.

Normative economics predicates itself upon maximizing both an agents social and political utility, recognized as “aggregating interests”.
Positive and normative economics are often synthesized in the style of practical idealism. In this discipline, sometimes called the “art of economics,” positive economics is utilized as a practical tool for achieving normative objectives, which often involve policy changes or states of affairs.
What is Positive Economics?

Positive economics is the stream of economics that has an objective approach, relied on facts. It concentrates on the description, quantification, and clarification of economic developments, prospects, and allied matters. This subdivision of economics relies on objective data analysis and relevant facts and figures. Therefore, it tries to establish a cause-and-effect relationship or behavioral relationship that can help determine as well as test the advancement of economic theories.
Here, the study of economics is more objective and focuses more on facts. Moreover, the statements are precise, descriptive, and measurable. Such reports can be quantified with respect to noticeable evidence and historical references.
Positive economics is an objective stream of economics that relies on facts or what is happening.
Conclusions drawn from positive economics analyses can be tested and backed up by data.
Positive economic theory does not provide advice or instruction.
Statements based on normative economics include value judgments or what should be in the future.
Comparison Chart

BASIS FOR COMPARISON
POSITIVE ECONOMICS
NORMATIVE ECONOMICS

Meaning
A branch of economics based on data and facts is positive economics.(POSITIVE ECONOMICS )
A branch of economics based on values, opinions and judgement is normative economics.(NORMATIVE ECONOMICS)

Nature
Descriptive(POSITIVE ECONOMICS)
Prescriptive(NORMATIVE ECONOMICS)

What it does?
Analyses cause and effect relationship.(POSITIVE ECONOMICS)
Passes value judgement.(NORMATIVE ECONOMICS)

Perspective
Objective(POSITIVE ECONOMICS)
Subjective(NORMATIVE ECONOMICS)

Study of
What actually is(POSITIVE ECONOMICS )
What ought to be(NORMATIVE ECONOMICS)

Testing
Statements can be tested using scientific methods.(POSITIVE ECONOMICS )
Statements cannot be tested.(NORMATIVE ECONOMICS)

Economic issues
It clearly describes economic issue.(POSITIVE ECONOMICS)
It provides solution for the economic issue, based on value.(NORMATIVE ECONOMICS)

2.What Is Ceteris Paribus?
Ceteris paribus, literally “holding other things constant,” is a Latin phrase that is commonly translated into English as “all else being equal.”

A dominant assumption in mainstream economic thinking, it acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same (constant). In the scientific sense, if we claim that one variable influences another, ceteris paribus, we are essentially controlling for the effects of some other variables.
Applications of Ceteris Paribus
Suppose that you wanted to explain the price of milk. With a little thought, it becomes apparent that milk costs are influenced by numerous things: the availability of cows, their health, the costs of feeding cows, the amount of useful land, the costs of possible milk substitutes, the number of milk suppliers, the level of inflation in the economy, consumer preferences, transportation, and many other variables. So an economist instead applies ceteris paribus, which essentially says if all other factors remain constant, a reduction in the supply of milk-producing cows, for example, causes the price of milk to rise.

me: Orih somtochukwu faithful. Reg number:2021/242480
*Differences between normative economics and positive economics*
Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness. In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.
The differences between positive and normative economics are explained in the points given below:
1).Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.
2).Positive economics is descriptive, but normative economics is prescriptive.
3).Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
4).The perspective of positive economics is objective while normative economics have a subjective perspective.
5).Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6).The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7).positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
* Lucidly discuss and analyse the concept of ceteris paribus in economics with example*
Ceteris paribus a Latin phrase, meaning “other things equal”; some other English translations of the phrase are “all other things being equal”, “other things held constant”, “all else unchanged”, and “all else being equal”. A statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors.
Economics’ ceteris paribus conditions include:
1) .The number of consumers in the market
2) .Consumer tastes or preferences
3) .prices of substitute goods
4) .consumer price expectations
5). Personal income
One of the disciplines in which ceteris paribus clauses are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes. When using ceteris paribus in economics, one assumes that all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases—ceteris paribus—the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good.
This operational description intentionally ignores both known and unknown factors that may also influence the relationship between price and quantity demanded, and thus to assume ceteris paribus is to assume away any interference with the given example. Such factors that would be intentionally ignored include: a change in the price of substitute goods, (e.g., the price of pork or lamb); a change in the level of risk aversion among buyers (e.g., due to an increase in the fear of mad cow disease); and a change in the level of overall demand for a good regardless of its current price (e.g., a societal shift toward vegetarianism).
example in economics is “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

NAME: TOCHUKWU ADAORAH DESTINY
REG. NO.11246747EF
DEPARTMENT: ECONOMICS
EMAIL ADDRESS:: destinyadaorah@gmail.com

1.DIFFERENCES BETWEEN POSITIVE ECONOMICS AND NORMATIVE ECONOMICS
a.) Positive Economics refers to a science or objective stream of economics that relies on facts or what is happening, it heavily concerns itself with value judgments and statements of “what ought to be” rather than facts.

While on the other hand Normative economics (as opposed to positive economics) is the part of economics that focuses on the idea of fairness and what the outcome of the economy or goals of public policy ought to be.
Normative economics is value judgment based. Most of the people think that the statements which are commonly accepted are a fact but in reality, they are valued. By, understanding the difference between positive and normative economics, you will learn about how the economy operates and to which extent the policy makers are taking correct decisions

b). Positive Economics are already in place and has no need of approval from economists because they are already facts.
While
Many normative (value) judgments, however, are held conditionally, to be given up if facts or knowledge of facts changes, so that a change of values may be purely scientific.

c). The perspective of positive economics is objective because it explains ‘what is’ while normative economics have a subjective perspective because it explains what should be’.

d.) Positive economics is related to the analysis which is limited to cause and effect relationship.
On the other hand, Normative economics aims at examining real economic events from the moral and ethical point of view. It is used to judge whether the economic events are desirable or not.

e.) The perspective of positive economics is objective while normative economics have a subjective perspective.
Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.

f.)The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
Positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.

2. DEFINITION OF CETERIS PARIBUS
This commonly-used phrase stands for ‘all other things being unchanged or constant’. It is used in economics to rule out the possibility of ‘other’ factors changing, i.e. the specific causal relation between two variables is focused.

In the fields of economics and finance, ceteris paribus is often used when making arguments about cause and effect.
For example: an economist might say raising the minimum wage increases unemployment, increasing the supply of money causes inflation, reducing marginal costs boosts economic profits for a company, or establishing rent control laws in a city causes the supply of available housing to decrease. Of course, these outcomes can be influenced by a variety of factors, but using ceteris paribus allows all other factors to remain constant, focusing on the impact of only one.

Ceteris paribus assumptions help transform an otherwise deductive social science into a methodologically positive “hard” science. It creates an imaginary system of rules and conditions from which economists can pursue a specific end. Put another way; it helps the economist circumvent human nature and the problems of limited knowledge.

Most, though not all, economists rely on ceteris paribus to build and test economic models. In simple language, it means the economist can hold all variables in the model constant and tinker with them one at a time. Ceteris paribus has its limitations, especially when such arguments are layered on top of one another. Nevertheless, it is an important and useful way to describe relative tendencies in markets.

As an example, take the laws of supply and demand. Economists say the law of demand demonstrates that ceteris paribus, more goods tend to be purchased at lower prices. Or that, if demand for any given product exceeds the product’s supply, ceteris paribus, prices will likely rise. In this situation, the price of an item is the only variable that should change. All else should remain ceteris paribus. If only the price were to change, we can appropriately forecast the outcome because of the laws of supply and demand.

Macroeconomics/GDP
In general, economists and other social scientists will report how variables influence one another while holding all else constant. So, if we say that low unemployment is associated with higher inflation, ceteris paribus, it means holding everything else constant like GDP growth, balance of trade, money supply, and so on. However, each of these other factors, among others, also can play into inflation.

Name: Orih somtochukwu faithful.
Reg number:2021/242480 department nursing
*Differences between normative economics and positive economics*
Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness. In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.
The differences between positive and normative economics are explained in the points given below:
1).Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.
2).Positive economics is descriptive, but normative economics is prescriptive.
3).Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
4).The perspective of positive economics is objective while normative economics have a subjective perspective.
5).Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6).The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7).positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
* Lucidly discuss and analyse the concept of ceteris paribus in economics with example*
Ceteris paribus a Latin phrase, meaning “other things equal”; some other English translations of the phrase are “all other things being equal”, “other things held constant”, “all else unchanged”, and “all else being equal”. A statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors.
Economics’ ceteris paribus conditions include:
1) .The number of consumers in the market
2) .Consumer tastes or preferences
3) .prices of substitute goods
4) .consumer price expectations
5). Personal income
One of the disciplines in which ceteris paribus clauses are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes. When using ceteris paribus in economics, one assumes that all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases—ceteris paribus—the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good.
This operational description intentionally ignores both known and unknown factors that may also influence the relationship between price and quantity demanded, and thus to assume ceteris paribus is to assume away any interference with the given example. Such factors that would be intentionally ignored include: a change in the price of substitute goods, (e.g., the price of pork or lamb); a change in the level of risk aversion among buyers (e.g., due to an increase in the fear of mad cow disease); and a change in the level of overall demand for a good regardless of its current price (e.g., a societal shift toward vegetarianism).
example in economics is “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

: Orih somtochukwu faithful.
Reg number:2021/242480 department nursing
*Differences between normative economics and positive economics*
Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness. In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.
The differences between positive and normative economics are explained in the points given below:
1).Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.
2).Positive economics is descriptive, but normative economics is prescriptive.
3).Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
4).The perspective of positive economics is objective while normative economics have a subjective perspective.
5).Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6).The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7).positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
* Lucidly discuss and analyse the concept of ceteris paribus in economics with example*
Ceteris paribus a Latin phrase, meaning “other things equal”; some other English translations of the phrase are “all other things being equal”, “other things held constant”, “all else unchanged”, and “all else being equal”. A statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors.
Economics’ ceteris paribus conditions include:
1) .The number of consumers in the market
2) .Consumer tastes or preferences
3) .prices of substitute goods
4) .consumer price expectations
5). Personal income
One of the disciplines in which ceteris paribus clauses are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes. When using ceteris paribus in economics, one assumes that all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases—ceteris paribus—the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good.
This operational description intentionally ignores both known and unknown factors that may also influence the relationship between price and quantity demanded, and thus to assume ceteris paribus is to assume away any interference with the given example. Such factors that would be intentionally ignored include: a change in the price of substitute goods, (e.g., the price of pork or lamb); a change in the level of risk aversion among buyers (e.g., due to an increase in the fear of mad cow disease); and a change in the level of overall demand for a good regardless of its current price (e.g., a societal shift toward vegetarianism).
example in economics is “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

Name: Orih somtochukwu faithful
Reg number:2021/242480 . department nursing
*Differences between normative economics and positive economics*
Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness. In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.
The differences between positive and normative economics are explained in the points given below:
1).Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.
2).Positive economics is descriptive, but normative economics is prescriptive.
3).Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
4).The perspective of positive economics is objective while normative economics have a subjective perspective.
5).Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6).The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7).positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
* Lucidly discuss and analyse the concept of ceteris paribus in economics with example*
Ceteris paribus a Latin phrase, meaning “other things equal”; some other English translations of the phrase are “all other things being equal”, “other things held constant”, “all else unchanged”, and “all else being equal”. A statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors.
Economics’ ceteris paribus conditions include:
1) .The number of consumers in the market
2) .Consumer tastes or preferences
3) .prices of substitute goods
4) .consumer price expectations
5). Personal income
One of the disciplines in which ceteris paribus clauses are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes. When using ceteris paribus in economics, one assumes that all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases—ceteris paribus—the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good.
This operational description intentionally ignores both known and unknown factors that may also influence the relationship between price and quantity demanded, and thus to assume ceteris paribus is to assume away any interference with the given example. Such factors that would be intentionally ignored include: a change in the price of substitute goods, (e.g., the price of pork or lamb); a change in the level of risk aversion among buyers (e.g., due to an increase in the fear of mad cow disease); and a change in the level of overall demand for a good regardless of its current price (e.g., a societal shift toward vegetarianism).
example in economics is “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

me: Orih somtochukwu faithful.
Reg number:2021/242480 department nursing
*Differences between normative economics and positive economics*
Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness. In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.
The differences between positive and normative economics are explained in the points given below:
1).Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.
2).Positive economics is descriptive, but normative economics is prescriptive.
3).Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
4).The perspective of positive economics is objective while normative economics have a subjective perspective.
5).Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6).The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7).positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
* Lucidly discuss and analyse the concept of ceteris paribus in economics with example*
Ceteris paribus a Latin phrase, meaning “other things equal”; some other English translations of the phrase are “all other things being equal”, “other things held constant”, “all else unchanged”, and “all else being equal”. A statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors.
Economics’ ceteris paribus conditions include:
1) .The number of consumers in the market
2) .Consumer tastes or preferences
3) .prices of substitute goods
4) .consumer price expectations
5). Personal income
One of the disciplines in which ceteris paribus clauses are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes. When using ceteris paribus in economics, one assumes that all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases—ceteris paribus—the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good.
This operational description intentionally ignores both known and unknown factors that may also influence the relationship between price and quantity demanded, and thus to assume ceteris paribus is to assume away any interference with the given example. Such factors that would be intentionally ignored include: a change in the price of substitute goods, (e.g., the price of pork or lamb); a change in the level of risk aversion among buyers (e.g., due to an increase in the fear of mad cow disease); and a change in the level of overall demand for a good regardless of its current price (e.g., a societal shift toward vegetarianism).
example in economics is “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

me: Orih somtochukwu faithful.
Reg number:2021/242480.department nursing
*Differences between normative economics and positive economics*
Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness. In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.
The differences between positive and normative economics are explained in the points given below:
1).Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.
2).Positive economics is descriptive, but normative economics is prescriptive.
3).Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
4).The perspective of positive economics is objective while normative economics have a subjective perspective.
5).Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6).The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7).positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
* Lucidly discuss and analyse the concept of ceteris paribus in economics with example*
Ceteris paribus a Latin phrase, meaning “other things equal”; some other English translations of the phrase are “all other things being equal”, “other things held constant”, “all else unchanged”, and “all else being equal”. A statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors.
Economics’ ceteris paribus conditions include:
1) .The number of consumers in the market
2) .Consumer tastes or preferences
3) .prices of substitute goods
4) .consumer price expectations
5). Personal income
One of the disciplines in which ceteris paribus clauses are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes. When using ceteris paribus in economics, one assumes that all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases—ceteris paribus—the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good.
This operational description intentionally ignores both known and unknown factors that may also influence the relationship between price and quantity demanded, and thus to assume ceteris paribus is to assume away any interference with the given example. Such factors that would be intentionally ignored include: a change in the price of substitute goods, (e.g., the price of pork or lamb); a change in the level of risk aversion among buyers (e.g., due to an increase in the fear of mad cow disease); and a change in the level of overall demand for a good regardless of its current price (e.g., a societal shift toward vegetarianism).
example in economics is “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

Name: Orih somtochukwu faithful.
Reg number:2021/242480.department nursing
*Differences between normative economics and positive economics*
Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness. In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.
The differences between positive and normative economics are explained in the points given below:
1).Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.
2).Positive economics is descriptive, but normative economics is prescriptive.
3).Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
4).The perspective of positive economics is objective while normative economics have a subjective perspective.
5).Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6).The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7).positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
* Lucidly discuss and analyse the concept of ceteris paribus in economics with example*
Ceteris paribus a Latin phrase, meaning “other things equal”; some other English translations of the phrase are “all other things being equal”, “other things held constant”, “all else unchanged”, and “all else being equal”. A statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors.
Economics’ ceteris paribus conditions include:
1) .The number of consumers in the market
2) .Consumer tastes or preferences
3) .prices of substitute goods
4) .consumer price expectations
5). Personal income
One of the disciplines in which ceteris paribus clauses are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes. When using ceteris paribus in economics, one assumes that all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases—ceteris paribus—the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good.
This operational description intentionally ignores both known and unknown factors that may also influence the relationship between price and quantity demanded, and thus to assume ceteris paribus is to assume away any interference with the given example. Such factors that would be intentionally ignored include: a change in the price of substitute goods, (e.g., the price of pork or lamb); a change in the level of risk aversion among buyers (e.g., due to an increase in the fear of mad cow disease); and a change in the level of overall demand for a good regardless of its current price (e.g., a societal shift toward vegetarianism).
example in economics is “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

Answer 1
Positive economics is a stream of economics that focuses on the description, qualification and a explanation of economic developments, expectations and associated phenomena. It relies on objective data analysis, relevant facts and associated figures. It attempts to establish any cause and effect relationships or behavioral associations which can help ascertain and test the development of economic theories. Positive economics is objective and fact- based where the statements are precise, descriptive, and clearly measurable.
While, Normative economics focuses on value based judgements aimed at improving economic development, investments, projects and the distribution of wealth. It’s goal is to summarize the desirability of various economic development, situations and programs by asking what should happen or what ought to be.
Normative economics is subjective and value based, originating from personal perspectives or opinions involved in decision making process.
Answer 2
ceteris paribus in economics is a reference to how one isolated variable may change an economic environment assuming all other variables remain the same. In economics, ceteris paribus is often highly hypothetical as national and macro economic conditions are highly intricate and complex. E.gs, all things being equal, if the piece of milk increases, people buy less milk. This assumption ignores how other substitutes are behaving, how household income is behaving or non-economic factors such as the health benefits of milk. Ceteris paribus, people will buy less of a product if the price is higher.

Name: Orih somtochukwu faithful. Reg number:2021/242480 department: nursing
*Differences between normative economics and positive economics*
Positive and Normative Economics is rightly known as the two arms of Economics. Positive economics deals with various economic phenomena, while normative economics focuses on what economics should be, this branch of economics talks about the value of the company’s fairness. In lucid language, positive economics answers the ‘what’ factor, whereas normative economics mandates the ‘should be’ or ‘ought to be’ section of economics.
The differences between positive and normative economics are explained in the points given below:
1).Positive Economics refers to a science which is based on data and facts. Normative economics is described as a science based on opinions, values, and judgment.
2).Positive economics is descriptive, but normative economics is prescriptive.
3).Positive economics explains cause and effect relationship between variables. On the other hand, normative economics pass value judgments.
4).The perspective of positive economics is objective while normative economics have a subjective perspective.
5).Positive economics explains ‘what is’ whereas normative economics explains ‘what should be’.
6).The statements of positive economics can be scientifically tested, proved or disproved, which cannot be done with statements of normative economics.
7).positive economics clearly define economic issues. Unlike normative economics, in which the remedies are provided for the economic issues, on the basis of value judgment.
* Lucidly discuss and analyse the concept of ceteris paribus in economics with example*
Ceteris paribus a Latin phrase, meaning “other things equal”; some other English translations of the phrase are “all other things being equal”, “other things held constant”, “all else unchanged”, and “all else being equal”. A statement about a causal, empirical, or logical relation between two states of affairs is ceteris paribus if it is acknowledged that the statement, although usually accurate in expected conditions, can fail because of, or the relation can be abolished by, intervening factors.
Economics’ ceteris paribus conditions include:
1) .The number of consumers in the market
2) .Consumer tastes or preferences
3) .prices of substitute goods
4) .consumer price expectations
5). Personal income
One of the disciplines in which ceteris paribus clauses are most widely used is economics, in which they are employed to simplify the formulation and description of economic outcomes. When using ceteris paribus in economics, one assumes that all other variables except those under immediate consideration are held constant. For example, it can be predicted that if the price of beef increases—ceteris paribus—the quantity of beef demanded by buyers will decrease. In this example, the clause is used to operationally describe everything surrounding the relationship between both the price and the quantity demanded of an ordinary good.
This operational description intentionally ignores both known and unknown factors that may also influence the relationship between price and quantity demanded, and thus to assume ceteris paribus is to assume away any interference with the given example. Such factors that would be intentionally ignored include: a change in the price of substitute goods, (e.g., the price of pork or lamb); a change in the level of risk aversion among buyers (e.g., due to an increase in the fear of mad cow disease); and a change in the level of overall demand for a good regardless of its current price (e.g., a societal shift toward vegetarianism).
example in economics is “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

Name: Okafor Francisca Ijeoma
Registration number: 10578107AF
Department: Economics
Academic Session: 2021/2022
Assignment Given On Eco 101: Understanding Normative And Positive Economics And Ceteris Paribus.

Positive And Normative Economics
What is Positive Economics?
Positive Economics is a simple statement about what is, what was or will be often written in “If ………then”. If A happens then B will follow. It is very essential cause it allows us to test statement with data. It is written or spoken in a way that allow it to be treated with data. You can use the data, look at the numbers to see if the statement is true or false.
Another essential note to know is that Positive statement is not always true. It can also be false statement.

What is Normative Economics?
Normative Economics are values, opinions and judgements. It often goes with a phrase that says “I think we should do this” or “We ought to do that”. “Do we think this is good or bad”. It is an opinion that cannot be tested to be true or false.

Examples Of Positive Economics
▪︎Programs like welfare reduce the incentive for people to work.
▪︎Raising taxes on the wealthy to pay for government programs grows the economy.
▪︎Raising taxes on the wealthy slows economic growth.

Examples Of Normative Economics
▪︎Paying people who aren’t working even though they could work is wrong and unfair.
▪︎The government should raise taxes on wealthy to pay for helping the poor.

Advantages And Disadvantages Of Positive
Economics
Positive Economics deeply and logically analysis the causing effect between variables. It is described and explained with the help of statistical data.
Advantages: The advantages of Positive Economics include the fact that the choices of Positive Economics are based on true data. Therefore, they can be used for real purposes rather than in making decisions in fancy. As there is no value judgements in Positive Economics, individuals can make better economic decisions as the facts of Positive Economics are based on facts.
Disadvantages: Disadvantages of Positive Economics include the fact that people often decide based on emotions rather than depending on data. So, Positive Economics is often overlooked. Moreover, having a present or past fact does not mean that future facts will be similar. So, Positive Economics cannot be 100% accurate in measuring economic outcomes.

Advantages And Disadvantages Of Normative
Economics
Normative Economics encompasses judgements which suggests “What ought to be” done in specific situation.
Advantages: The advantages of Normative analysis include the freedom to make choices. As Normative Economics is based on ideas, it is not necessary for economists to be 100% accurate in their judgements.
Disadvantages: The same stated above can be considered a disadvantage in some situations too. Disadvantages include too many variations from real situations and unrealistic considerations that cannot be applied to real lives.

Differences Between Positive And Normative
Economics
▪︎Positive Economics is descriptive in nature while Normative Economics is prescriptive in nature.
▪︎Positive Economics is based on scientific logic and facts while Normative Economics is based on individual opinions and values.
▪︎Positive Economics clearly explains economic problem and issues while Normative Economics provides solutions for economic problems based on value.
▪︎Positive Economics is described by classical economists while Normative Economics is described by neo – classical economists.
▪︎Positive Economics statement can be tested and verified while Normative Economics statement cannot be tested and verified.

Conclusion
Both Positive and Normative Economics has their own merits and demerits and they can be used in different aspects to get better results. Some may argue that Positive Economics is better than Normative Economics as it deals with facts, but sometimes dealing with ideas is also important.
In a nutshell, using Positive and Normative Economics to their full potential can lead an economy to obtain the highest value in the long run.

Ceteris Paribus
What is Ceteris Paribus?
Ceteris Paribus is a Latin phrase generally used by saying “All other things being equal”. Ceteris Paribus is often used when making arguments about case and effect. The world is so complex, it’s basically impossible to consider every possible variable. So, Ceteris Paribus assumption simplifies the equation so that the direct effect of X on Y can be isolated.

Examples Of Ceteris Paribus
▪︎If the price of Pepsi falls, Ceteris Paribus, it’s demand will increase.
▪︎If I increase the price of a product, Ceteris Paribus, what will happen to demand?
▪︎if the minimum wage is increased, what will happen to productivity?

Importance Of Ceteris Paribus
▪︎In economics, it acts as a shorthand indication of the effect one economic variable has on another, provided all other variables remain the same.
▪Many economists rely on Ceteris Paribus to describe relative tendencies in markets and to build and test economic models.
▪︎It helps us to develop some form of understanding of economic mechanisms.
▪︎It allows us to form a basic understanding and principle by which we can build on.

Conclusion
Although the real world is generally too messy to test economic theories that rely on Ceteris Paribus assumptions, there are ways to get around this. Behavioral economists design experiments that essentially create Ceteris Paribus conditions within a controlled laboratory setting. Participants in the experiments are asked to make decisions under certain conditions. The experiments is then able to isolate the direct effects of policy changes by altering one condition at a time while holding all else equal: Ceteris Paribus!.

Normative economics:
This is a branch of economics that is based on values, opinions and judgement. It deals with normative statements that is statements that cannot be tested. It focuses on the idea of fairness and what the outcome of the economy “ought to be”. It passes value judgements and provides solutions for economic issues.
Positive economics:
A branch of economics based on data and facts. It also deals with positive statements meaning that the statements can be tested using scientific methods. Positive economics as a science concerns analysis of economic behavior to determine “what actually is ” true, it also analyses cause and effect relationship. It clearly describes economic issues.

Differences between Normative and Positive Economics
1. Normative economics is based on value judgement while positive economics is based on facts and cannot be approved or disapproved
2. Normative economics is related to the analysis which is limited to cause and effect relationship while positive economics is aimed

Name: OCHIN LILIAN CHIDINMA
Matric Number: 2021/234551
Department: Nursing Sciences

Name- Abaligwe favour iheoma
Department- Biochemistry
Registration Number- 2020/241486
Economics Assignment ( Eco 101)
1a.Normative economics is subjective and value-based, originating from personal perspectives or opinions involved in the decision-making process. 
while
1b.Positive economics is a stream of economics that focuses on the description, quantification, and explanation of economic developments, expectations, and associated phenomena.

2. The concept of Ceteris Paribus in Economics is
In the fields of economics and finance, ceteris paribus is often used when making arguments about cause and effect. An economist might say raising the minimum wage  increases unemployment, increasing the supply of money causes inflation, reducing marginal cost boosts economic profits for a company, or establishing rent control laws in a city causes the supply of available housing to decrease. 
The practical example of Ceteris Paribus are;
1.One example of ceteris paribus would be the economic law of supply. According to this law, an increase in price results in an increase in quantity supplied, when keeping others factors constant or ceteris paribus. Using ceteris paribus, economists can focus solely on the two factors involved: price and supply.
2. If the price of Coca-Cola falls, ceteris paribus, its demand will increase. Ceteris paribus means that other factors are not considered, or are considered to remain constant. Pepsi may react and reduce their prices as well, which may mean demand remains unchanged.

1 . positive economics describes and explain various economic phenomena.normative economics focuses on the value of economic fairness or what the economy “should to be”or “ought to be”. while positive economics is based on fact and cannot be approved or disapproved, normative economics is based on value judgements. normative economics aims to determine what should happen or what ought to y, while positive economics describe economic programs, situations and conditions.
2 . ceteris paribus means’other things equal’with regards to economics,it assumes that other influencing factors are held constant. ceteris paribus is where all other variables are kept equal. for example:if the price of Coca-Cola Falls, ceteris paribus it’s demand will increase. in economics ceteris paribus is the term used to denote that other factors are held constant.

1.faculty: social science
2.reg no:11228041JH
3 department: public administration and local government
4.level:100l
5.course code.Eco 101
Definition of Normative Economics
This can be seen as a focus on value based judgement,whose aim is to improve the economic growth and development, investment project to distribute the economy’s wealth.
Definition of Positive Economics
Can be said to be the study of analysis in economics,in a sense that what happened is currently happening in the economy can be used to predict or assume the future of that economy.
Difference between positive and normative economy.
Positive economics describes the various phenomenal that takes place in the economy while normative economics focuses on what the economy “should be” or “ought to be,” or the importance of economic fairness.
Normative economics is based on value judgments, whereas positive economics is founded on truth and cannot be approved or condemned.
Analysis that only considers cause and effect relationships is related to positive economics. The goal of normative economics, on the other hand, is to examine actual economic occurrences from a moral and ethical standpoint. It is employed to determine whether or not certain economic occurrences are desirable.
In order to build economic theories, positive economics looks at cause-and-effect links, behavioral finance, and fact-based economic relationships. Policymakers can adopt normative value judgments by using positive economic theory to analyze behavioral relationships and back up claims. Making assessments of economic value is profitable in this study of economic behavior while normative economics examines what ought to occur as opposed to what is now taking place. This area of economics specializes in the concept of fairness and deals with normative claims. It is impacted by value judgments because it is an analysis that is based on opinions. Results are graded in normative economics as either good or negative. There is no way to support or refute an opinion because of the nature of this area of economics.
Due to the availability of evidence, the majority of economists favor a positive view of the economy. This aids them in later, necessary, verification of the statements. However, normative economics offers the best strategies for achieving an optimal economic condition. To create the best public policies, it is crucial to use both positive and normative economics.

2) Ceteris paribus literally translates to “everything else equal” in Latin.

Its English equivalent is frequently used in economics. Without taking into account changes to any other external circumstances, it ensures that changes detected fall within the purview of two important elements. The Latin phrase mutatis mutandis, which can be translated as “with all appropriate distinctions being considered,” is the reverse of this. Therefore, mutatis mutandis takes into account the final outcome of events after all relevant modifications have taken place, whereas ceteris paribus concentrates on the relationship between only two variables.
This is exactly the same as using a constant in mathematics, where one variable in an equation may change but another remains constant in all circumstances. The idea of ceteris paribus is fundamental to comprehending economics, just as scarcity is.

For instance, these variables should be taken into account in isolation from any other reasonable aspects to comprehend what might happen to the price or availability of a specific resource considering changes to the quantity required (desired) by customers. It would be far too difficult, if not impossible in most cases, to draw useful inferences from an equation if all pertinent components were observed.
In a similar vein, experts forecast that when fuel prices rise, consumer demand will decline and other factors stay the same. If we take into account some unknowable elements in this case, such as whether the buyers enjoy using fuel and whether it is highly useful to them, then they won’t stop doing so even if costs rise.

1. Analysis that only considers cause and effect relationships is related to positive economics. The goal of normative economics, on the other hand, is to examine actual economic occurrences from a moral and ethical standpoint. It is employed to determine whether or not certain economic occurrences are desirable.

2. Ceteris Paribus essentially means “other things equal.” It makes the assumption that other influencing elements will remain constant when discussing economics. When all other factors are held constant, the phrase “ceteris paribus” is used. For instance, if Coca-price Cola’s drops, ceteris paribus, its demand will rise.

1.Positive economics describes and explains various economic phenomena. Normative economics focuses on the value of economic fairness, or what the economy “should be” or “ought to be.” While positive economics is based on fact and cannot be approved or disapproved, normative economics is based on value judgments.

2.In essence, Ceteris Paribus means ‘other things equal’. With regards to economics, it assumes that other influencing factors are held constant. Ceteris paribus is where all other variables are kept equal. For example, if the price of Coca-Cola falls, ceteris paribus, its demand will increase.

2. Ceteris paribus is a Latin phrase that generally means all other things being equal.
In economics it acts as a shorthand indication of the effect one economic variable has on another.
Ceteris paribus is often used when making argument about cause and effect.
Examples:(a). Interest rate: There’s often an inverse relationship between interest rate and demand for borrowing. This is because higher interest loan causes loan to become more expensive. Therefore, ceteris paribus, higher interest rate causes lower demand for debt
(b). Minimum wage: Raising the minimum wage is thought to lower employment as business cuts cost.
(c). An economist might say raising the minimum wage increases unemployment, increasing the supply of money causes inflation, reducing marginal cost boosts economic profit for a company.
(d). Economists and other social scientists reports how variable influence one another while holding all else constant. Low employment is associated with higher inflation. Ceteris paribus, it means holding everything else constant like GDP growth, balance of trade and money supply.

1. Positive economic describes and explain various economic phenomenon .
It is based on fact and cannot be approved or disapproved . While
Normative economic focuses on the value of economic fairness or what the economy should be or ought to be.
It is based on value judgement.

1)Normative economics refers to the beliefs that support the valued judgement which is better for the nation’s economic future and for social welfare. Having a belief that the income should be distributed evenly in the economy is an example of normative economics. WHILE Positive economics refers to the matter of the presence of the theory along with the proven facts and figures that are taken into account before developing a theory. Law of demand is an example of positive economics.
2) Ceteris paribus is a Latin phrase that is generally used for saying ‘with other things being the same’. It is particularly crucial in the study of cause and effect relationship between two specific variables such that other relevant factors influencing these are assumed to be constant.For Example in economics “If the price of milk falls, ceteris paribus, the demand for milk will rise.” This means that, if other factors, such as deflation, pricing objectives, utility, and marketing methods, do not change, the decrease in the price of milk will lead to an increase in demand for it.

1.Positive economics describes and explains various economic phenomena. Normative economics focuses on the value of economic fairness, or what the economy “should be” or “ought to be.” While positive economics is based on fact and cannot be approved or disapproved, normative economics is based on value judgments.

2.In essence, Ceteris Paribus means ‘other things equal’. With regards to economics, it assumes that other influencing factors are held constant. Ceteris paribus is where all other variables are kept equal. For example, if the price of pepsi falls, ceteris paribus, its demand will increase.

1. Normative economics is a perspective on economics that reflects normative, or ideologically prescriptive judgments toward economic development, investment projects, statements, and scenarios.

Unlike positive economics, which relies on objective data analysis, normative economics heavily concerns itself with value judgments and statements of “what ought to be” rather than facts based on cause-and-effect statements. It expresses ideological judgments about what may result in economic activity if public policy changes are made. Normative economic statements can’t be verified or tested.

Normative economics aims to determine what should happen or what ought to be.
While positive economics describe economic programs, situations, and conditions as they exist, normative economics aims to prescribe solutions.
Normative economics expresses ideological judgments about what may result in economic activity if public policy changes are made.
Behavioral economics tends to be a normative project.
Normative economics cannot be verified or tested.

2.Ceteris paribus constant,” is a Latin phrase that is commonly translated into English as “all else being equal.”

A dominant assumption in mainstream economic thinking, it acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same (constant). In the scientific sense, if we claim that one variable influences another, ceteris paribus, we are essentially controlling for the effects of some other variable.
In the fields of economics and finance, ceteris paribus is often used when making arguments about cause and effect. An economist might say raising the minimum wage increases unemployment, increasing the supply of money causes inflation, reducing marginal costs boosts economic profits for a company, or establishing rent control laws in a city causes the supply of available housing to decrease. Of course, these outcomes can be influenced by a variety of factors, but using ceteris paribus allows all other factors to remain constant, focusing on the impact of only one.

Ceteris paribus assumptions help transform an otherwise deductive social science into a methodologically positive “hard” science. It creates an imaginary system of rules and conditions from which economists can pursue a specific end. Put another way; it helps the economist circumvent human nature and the problems of limited knowledge.

Most, though not all, economists rely on ceteris paribus to build and test economic models. In simple language, it means the economist can hold all variables in the model constant and tinker with them one at a time. Ceteris paribus has its limitations, especially when such arguments are layered on top of one another. Nevertheless, it is an important and useful way to describe relative tendencies in markets.

Suppose that you wanted to explain the price of milk. With a little thought, it becomes apparent that milk costs are influenced by numerous things: the availability of cows, their health, the costs of feeding cows, the amount of useful land, the costs of possible milk substitutes, the number of milk suppliers, the level of inflation in the economy, consumer preferences, transportation, and many other variables. So an economist instead applies ceteris paribus, which essentially says if all other factors remain constant, a reduction in the supply of milk-producing cows, for example, causes the price of milk to rise.

Supply and Demand
As an example, take the laws of supply and demand. Economists say the law of demand demonstrates that ceteris paribus, more goods tend to be purchased at lower prices. Or that, if demand for any given product exceeds the product’s supply, ceteris paribus, prices will likely rise. In this situation, the price of an item is the only variable that should change. All else should remain ceteris paribus. If only the price were to change, we can appropriately forecast the outcome because of the laws of supply and demand.
Macroeconomics/GDP
In general, economists and other social scientists will report how variables influence one another while holding all else constant. So, if we say that low unemployment is associated with higher inflation, ceteris paribus, it means holding everything else constant like GDP growth, balance of trade, money supply, and so on. However, each of these other factors, among others, also can play into inflation.

Minimum Wage
We can also say the same thing about the minimum wage: ceteris paribus, raising the minimum wage is thought to lower employment as businesses cut costs. But this also ignores many other social and political factors. For example, employees may work harder and be more productive with higher wages. Or, better-paid workers may spend more and increase aggregate demand.

Interest Rates
There is often an inverse relationship between interest rates and the demand for borrowing. This is because higher interest rates cause loans to become more expensive. Therefore, ceteris paribus, higher interest rates cause decreased demand for debt. Of course, other factors (consumer demand, consumer preference, consumer creditworthiness) are all considers that may change the outcome of the statement. However, when all factors regarding the borrower are isolated, higher interest rates mean higher loan costs which decreases demand.

Supply Chain
There are a tremendous amount of factors that go into a unit’s production. This includes delivery of raw materials, labor hours, equipment availability, ingredient pricing, packing and delivery, or distribution. Therefore, when considering how an item may move throughout the supply chain process, economists may make claims on outcomes assuming all other variables are constant. For example, ceteris paribus, higher raw material prices will decrease manufacturing supply if companies don’t increase their production budgets. This claim does not consider labor hours, packaging, or delivery.

Since economic variables can only be isolated in theory and not in practice, ceteris paribus can only ever highlight tendencies, not absolutes.
Ceteris Paribus and Economic Science
Two major publications helped move mainstream economics from a deductive social science based on logical observations and deductions into an empirically positivist natural science. The first was Léon Walras’ Elements of Pure Economics, published in 1874, which introduced general equilibrium theory.
2
The second was John Maynard Keynes’ The General Theory of Employment, Interest, and Money, first published in 1936, which created modern macroeconomics.
3

In an attempt to be more like the academically respected “hard sciences” of physics and chemistry, economics became math-intensive. Variable uncertainty, however, was a major problem; economics could not isolate controlled and independent variables for math equations. There was also a problem with applying the scientific method, which isolates specific variables and tests their interrelatedness to prove or disprove a hypothesis.

Economics does not naturally lend itself to scientific hypothesis testing as does physics. In the field of epistemology, scientists can learn through logical thought experiments, also called deduction, or through empirical observation and testing, also called positivism. Geometry is a logically deductive science.

Physics is an empirically positive science. Unfortunately, economics and the scientific method are naturally incompatible. No economist has the power to control all economic actors, hold all of their actions constant, and then run specific tests. No economist can even identify all of the critical variables in a given economy. For any given economic event, there could be dozens or hundreds of potential independent variables.

Enter ceteris paribus. Mainstream economists construct abstract models where they pretend all variables are held constant, except the one they want to test. This style of pretending, called ceteris paribus, is the crux of general equilibrium theory.
1

As economist Milton Friedman wrote in 1953, “theory is to be judged by its predictive power for the class of phenomena which it is intended to ‘explain.'”
4
By imagining all variables save one are held constant, economists can transform relative deductive market tendencies into absolute controllable mathematical progressions. Human nature is replaced with balanced equations.

Ceteris paribus drives supply and demand curve expectations. The relationship between quantity and price can only be determined if the variables in question are influenced and the rest are held constant.

Benefits of Ceteris Paribus
Uses Scientific Method Approach
Suppose an economist wants to prove a minimum wage causes unemployment or that easy money causes inflation. They could not possibly set up two identical test economies and introduce a minimum wage law or start printing dollar bills. So the positive economist, charged with testing their theories, must create a suitable framework for the scientific method, even if this means making very unrealistic assumptions. The economist assumes buyers and sellers are price-takers rather than price-makers.

Leverages Perfect Information
The economist also assumes actors have perfect information about their choices since any indecision or incorrect decision based on incomplete information creates a loophole in the model. If the models produced in ceteris paribus economics appear to make accurate predictions in the real world, the model is considered successful. If the models do not appear to make accurate predictions, they are revised.

Employs Positive Economics
This can make positive economics tricky; circumstances might exist that make one model look correct one day but incorrect a year later. Some economists reject positivism and embrace deduction as the principal mechanism of discovery. The majority, however, accept the limits of ceteris paribus assumptions, to make the field of economics more like chemistry and less like philosophy.

Enables Price Discovery
As economists compile data from various scenarios, static supply and demand charts are formed to devise a strategic plan of pricing, supply, or other economic factors. As a single variable is tweaked, a demand curve should be formed that allows for theoretical pricing application without having to go to market with those actual prices.

Overcomes Impossible Scenarios
Without ceteris paribus, many scenarios that are analyzed simply would not be able to happen. For example, consider the situation where only variable along a supply chain changes and all other variables remain static and unchanged. This situation would not able to occur in real life as so many aspects of the supply chain are uncontrollable. Therefore, ceteris paribus allows for economists and analysts to devise scenarios that would otherwise not be able to exist.

Criticisms of Ceteris Paribus
Overcomes Impossible Scenarios
Ceteris paribus assumptions are at the heart of nearly all mainstream microeconomic and macroeconomic models. Even so, some critics of mainstream economics point out that ceteris paribus gives economists the excuse to bypass real problems about human nature.
5
Though this can be a benefit for theoretical application, these scenarios also may never play out in the real world which contests how applicable some findings may be.

Let’s go back to the example of supply and demand, one of the favorite uses of ceteris paribus. Every introductory textbook on microeconomics shows static supply and demand charts where prices are given to both producers and consumers; that is, at a given price, consumers demand and producers supply a certain amount.

This is a necessary step, at least in this framework, so that economics can assume away the difficulties in the price-discovery process. But prices are not a separate entity in the real world of producers and consumers. Rather, consumers and producers themselves determine prices based on how much they subjectively value the good in question versus the quantity of money for which it is traded.

Dilutes Logical Value
Economists admit these assumptions are highly unrealistic, and yet these models lead to concepts such as utility curves, cross elasticity, and monopoly. Antitrust legislation is actually predicated on perfect competition arguments. The Austrian school of economics believes ceteris paribus assumptions have been taken too far, transforming economics from a useful, logical social science into a series of math problems.
5

May Overshadow What Should Be Analyzed
Financial consultant Frank Shostak wrote that this supply-demand framework is “detached from the facts of reality.”
6
Rather than solving equilibrium situations, he argued, students should learn how prices emerge in the first place. He claimed any subsequent conclusions or public policies derived from these abstract graphical representations are necessarily flawed.

Like prices, many other factors that affect the economy or finance are continuously in flux. Independent studies or tests may allow for the use of the ceteris paribus principle. But in reality, with something like the stock market, one can never assume “all other things being equal.” There are too many factors affecting stock prices that can and do change constantly; you can’t isolate just one.

Ignores Human Nature and Emotions
As nice as a black and white world would be, the truth is there are too many variables tied to human nature. Humans are naturally unpredictable and act in irrational ways. Though economic laws may make sense, there are situations in which people don’t do what is theoretically the best for them to do. In these cases, items like the law of supply and the law of demand may be broken, causing any analysis to falter
Ceteris paribus in economics is a reference to how one isolated variable may change an economic environment assuming all other variables remain the same. In economics, ceteris paribus is often highly hypothetical as national economics and macroeconomic conditions are highly intricate and complex. However, ceteris paribus is the practice of seeing how a single economic concept (i.e. inflation) can impact broader concepts.
All things being equal, if the price of milk increases, people will buy less milk. This assumption ignores how other substitutes are behaving, how household income is behaving, or non-economic factors such as the health benefits of milk. Ceteris paribus, people will buy less of a product if the price is higher.
Ceteris paribus is considered natural law. It is not codified by any government; instead, it is thought to naturally occur based on how certain variables interact. For example, if the United States drilled for more oil domestically, there would be more supply for gasoline and the price of gas would drop. There is no law that defines that this would happen; it’s simply assumed as the outcome based on how situations naturally flow together.
Ceteris paribus helps determine what variables impact outcomes. By holding one variable constant or assuming that only one variable changes, it is inferred that any corresponding change is directly correlated to that single variable. Ceteris paribus may help drive metrics on customer taste, customer preference, consumer spending, the price of goods, market expectations, or government policy.
Ceteris paribus is a broad term that defines what variables are changing or what variables are remaining the same in a given situation. Often, to isolate only one variable, economists cite ceteris paribus to clarify that their assumptions on a given outcome are only valid if all other variables are remaining the same. Though ceteris paribus is truly unlikely due to the complexity of macroeconomic factors, it may still be useful in testing variables and determining what causes outcome.

1) THE DIFFERENCE BETWEEN POSITIVE AND NORMATIVE ECONOMICS
Positive economics is concerned with ” what is” and it do not involve value jugdement.They are statement about”what is,what was or what will be” it focus on statement with matter and fact and what is happening. While
Normative economics is concerned with “what ought to be” .if an economist suggest that the government ought to try hard to reduce the level of unemployment and the level of inflation.This is a normative statement.when economist says that the government ought to do something this involves their making judgement about the value of various things that the government could do with it’s limited resources.

CONCEPT ANALYSIS OF CETERUS PARIBUS IN ECONOMICS AND IT’S PRACTICAL ILLUSTRATION
In economics context the use of ceteris paribus is first invented by petrus Olivia in 1295 in the 16th century. The assumption latin words ‘being all unchanged or held constant ” It is important in determining causation and in helping or isolation multiple independent variables affecting a dependent variable.
However, all things being equal (ceteris paribus) in economics is referred to how how one isolated variable changes an economic environment when all other variable remain the same.it is highly hypothetical like macroeconomic condition and national economic which are highly intricated and wide or complex.
Ceteris paribus people will buy less of a product if the price is higher.for instances, if the price of milk increases people will buy less milk.this assumption ignores how other substitutes are behaving or house hold income is reacting or even the non- economic factors such as the health benefits of milk. Another example is that economics as a law of supply: Accordingly to the law an increase in price result in an increase in quantity supplied, when keeping others factor constant or ceteris paribus.

In conclusion, ceteris paribus is practically more of how a simple economic concept such as inflation can impact broader concept.

omeogo mmesoma esther
reg no-2021/245468,
e-mail-mmesomae464@gmail.com.
department of social science education(unit-economics and education)

1=positive economics describes and explain various economics phenomenom and is based on facts and data and cant be approved or disapproved ;it can equallybe tested and data and economic model built to conclude if it is true or not ;while normative economics is focused on the value of economic fairness ,what the economy should be or ought to be ,it is based on value judgement ,it is more like an opinion and cannot be truly tested.
2=ceteris paribus is where all variables are equal;it is used to explain the theory behind the law of economics and nature for example if the price of yam decreases then the demand of yam increases if all factors or variables are not considered or do not change (remains the same ).

Name: Okafor Francisca Ijeoma
Registration number: 10578107AF
Department: Economics
Academic Session: 2021/2022
Assignment Given On Eco 101: Understanding Normative And Positive Economics And Ceteris Paribus.
Positive And Normative Economics
What is Positive Economics?
Positive Economics is a simple statement about what is, what was or will be often written in “If ………then”. If A happens then B will follow. It is very essential cause it allows us to test statement with data. It is written or spoken in a way that allow it to be treated with data. You can use the data, look at the numbers to see if the statement is true or false.
Another essential note to know is that Positive statement is not always true. It can also be false statement.
What is Normative Economics?
Normative Economics are values, opinions and judgements. It often goes with a phrase that says “I think we should do this” or “We ought to do that”. “Do we think this is good or bad”. It is an opinion that cannot be tested to be true or false.
Examples Of Positive Economics
▪︎Programs like welfare reduce the incentive for people to work.
▪︎Raising taxes on the wealthy to pay for government programs grows the economy.
▪︎Raising taxes on the wealthy slows economic growth.
Examples Of Normative Economics
▪︎Paying people who aren’t working even though they could work is wrong and unfair.
▪︎The government should raise taxes on wealthy to pay for helping the poor.
Advantages And Disadvantages Of Positive
Economics
Positive Economics deeply and logically analysis the causing effect between variables. It is described and explained with the help of statistical data.
Advantages: The advantages of Positive Economics include the fact that the choices of Positive Economics are based on true data. Therefore, they can be used for real purposes rather than in making decisions in fancy. As there is no value judgements in Positive Economics, individuals can make better economic decisions as the facts of Positive Economics are based on facts.
Disadvantages: Disadvantages of Positive Economics include the fact that people often decide based on emotions rather than depending on data. So, Positive Economics is often overlooked. Moreover, having a present or past fact does not mean that future facts will be similar. So, Positive Economics cannot be 100% accurate in measuring economic outcomes.
Advantages And Disadvantages Of Normative
Economics
Normative Economics encompasses judgements which suggests “What ought to be” done in specific situation.
Advantages: The advantages of Normative analysis include the freedom to make choices. As Normative Economics is based on ideas, it is not necessary for economists to be 100% accurate in their judgements.
Disadvantages: The same stated above can be considered a disadvantage in some situations too. Disadvantages include too many variations from real situations and unrealistic considerations that cannot be applied to real lives.
Differences Between Positive And Normative
Economics
▪︎Positive Economics is descriptive in nature while Normative Economics is prescriptive in nature.
▪︎Positive Economics is based on scientific logic and facts while Normative Economics is based on individual opinions and values.
▪︎Positive Economics clearly explains economic problem and issues while Normative Economics provides solutions for economic problems based on value.
▪︎Positive Economics is described by classical economists while Normative Economics is described by neo – classical economists.
▪︎Positive Economics statement can be tested and verified while Normative Economics statement cannot be tested and verified.
Conclusion
Both Positive and Normative Economics has their own merits and demerits and they can be used in different aspects to get better results. Some may argue that Positive Economics is better than Normative Economics as it deals with facts, but sometimes dealing with ideas is also important.
In a nutshell, using Positive and Normative Economics to their full potential can lead an economy to obtain the highest value in the long run.
Ceteris Paribus
What is Ceteris Paribus?
Ceteris Paribus is a Latin phrase generally used by saying “All other things being equal”. Ceteris Paribus is often used when making arguments about case and effect. The world is so complex, it’s basically impossible to consider every possible variable. So, Ceteris Paribus assumption simplifies the equation so that the direct effect of X on Y can be isolated.
Examples Of Ceteris Paribus
▪︎If the price of Pepsi falls, Ceteris Paribus, it’s demand will increase.
▪︎If I increase the price of a product, Ceteris Paribus, what will happen to demand?
▪︎if the minimum wage is increased, what will happen to productivity?
Importance Of Ceteris Paribus
▪︎In economics, it acts as a shorthand indication of the effect one economic variable has on another, provided all other variables remain the same.
▪Many economists rely on Ceteris Paribus to describe relative tendencies in markets and to build and test economic models.
▪︎It helps us to develop some form of understanding of economic mechanisms.
▪︎It allows us to form a basic understanding and principle by which we can build on.
Conclusion
Although the real world is generally too messy to test economic theories that rely on Ceteris Paribus assumptions, there are ways to get around this. Behavioral economists design experiments that essentially create Ceteris Paribus conditions within a controlled laboratory setting. Participants in the experiments are asked to make decisions under certain conditions. The experiments is then able to isolate the direct effects of policy changes by altering one condition at a time while holding all else equal: Ceteris Paribus

No1
Positive economics is fact and objective based.in positive analysis we gain fact, what it is e.g I’m a female. This is a fact that you can prove or disapprove it.positive economic statements must not be correct but they must be tested and proved or disapproved. On the other hand normative economics is subjective and value based. In normative analysis we gain opinion judgement, we ask questions like what should be or what ought to be e.g girls are cooler than boys, it is an opinion and there’s no way we can prove wether it’s true. This makes it a normative statement.
Disagreementsover public policies typically revolve around normative economic statements and the disagreements persist because neither side can prove that it’s correct or that its opponent is incorrect.
Further differences between normative economics and positive economics.
Positive economics can be proved or verified while normative economics can’t be proved.
Positive economics is objective while normative economics is subjective.
Positive economics is fact based while normative economics is not fact based.
No2
Ceteris paribus is a word gotten from Latin word that means all things being equal, unchanged or can.it is used in economics to rule out the factor the possibility of other factors changing, that is the casual relation between two variables is focused. Ceteris paribus is the economic law of supply, in the law an increase in price results in an increase in quantity e.g if the price of toothpaste fails there will be an increase demand.

Name: Okafor Francisca Ijeoma
Registration number: 10578107AF
Department: Economics
Academic Session: 2021/2022
Assignment Given On Eco 101: Understanding Normative And Positive Economics And Ceteris Paribus.

Positive And Normative Economics
What is Positive Economics?
Positive Economics is a simple statement about what is, what was or will be often written in “If ………then”. If A happens then B will follow. It is very essential cause it allows us to test statement with data. It is written or spoken in a way that allow it to be treated with data. You can use the data, look at the numbers to see if the statement is true or false.
Another essential note to know is that Positive statement is not always true. It can also be false statement.

What is Normative Economics?
Normative Economics are values, opinions and judgements. It often goes with a phrase that says “I think we should do this” or “We ought to do that”. “Do we think this is good or bad”. It is an opinion that cannot be tested to be true or false.

, Examples Of Positive Economics
▪︎Programs like welfare reduce the incentive for people to work.
▪︎Raising taxes on the wealthy to pay for government programs grows the economy.
▪︎Raising taxes on the wealthy slows economic growth.

Examples Of Normative Economics
▪︎Paying people who aren’t working even though they could work is wrong and unfair.
▪︎The government should raise taxes on wealthy to pay for helping the poor.

Advantages And Disadvantages Of Positive
Economics
Positive Economics deeply and logically analysis the causing effect between variables. It is described and explained with the help of statistical data.
Advantages: The advantages of Positive Economics include the fact that the choices of Positive Economics are based on true data. Therefore, they can be used for real purposes rather than in making decisions in fancy. As there is no value judgements in Positive Economics, individuals can make better economic decisions as the facts of Positive Economics are based on facts.
Disadvantages: Disadvantages of Positive Economics include the fact that people often decide based on emotions rather than depending on data. So, Positive Economics is often overlooked. Moreover, having a present or past fact does not mean that future facts will be similar. So, Positive Economics cannot be 100% accurate in measuring economic outcomes.

Advantages And Disadvantages Of Normative
Economics
Normative Economics encompasses judgements which suggests “What ought to be” done in specific situation.
Advantages: The advantages of Normative analysis include the freedom to make choices. As Normative Economics is based on ideas, it is not necessary for economists to be 100% accurate in their judgements.
Disadvantages: The same stated above can be considered a disadvantage in some situations too. Disadvantages include too many variations from real situations and unrealistic considerations that cannot be applied to real lives.

Differences Between Positive And Normative
Economics
▪︎Positive Economics is descriptive in nature while Normative Economics is prescriptive in nature.
▪︎Positive Economics is based on scientific logic and facts while Normative Economics is based on individual opinions and values.
▪︎Positive Economics clearly explains economic problem and issues while Normative Economics provides solutions for economic problems based on value.
▪︎Positive Economics is described by classical economists while Normative Economics is described by neo – classical economists.
▪︎Positive Economics statement can be tested and verified while Normative Economics statement cannot be tested and verified.

Conclusion
Both Positive and Normative Economics has their own merits and demerits and they can be used in different aspects to get better results. Some may argue that Positive Economics is better than Normative Economics as it deals with facts, but sometimes dealing with ideas is also important.
In a nutshell, using Positive and Normative Economics to their full potential can lead an economy to obtain the highest value in the long run.

Ceteris Paribus
What is Ceteris Paribus?
Ceteris Paribus is a Latin phrase generally used by saying “All other things being equal”. Ceteris Paribus is often used when making arguments about case and effect. The world is so complex, it’s basically impossible to consider every possible variable. So, Ceteris Paribus assumption simplifies the equation so that the direct effect of X on Y can be isolated.

Examples Of Ceteris Paribus
▪︎If the price of Pepsi falls, Ceteris Paribus, it’s demand will increase.
▪︎If I increase the price of a product, Ceteris Paribus, what will happen to demand?
▪︎if the minimum wage is increased, what will happen to productivity?
Importance Of Ceteris Paribus
▪︎In economics, it acts as a shorthand indication of the effect one economic variable has on another, provided all other variables remain the same.
▪Many economists rely on Ceteris Paribus to describe relative tendencies in markets and to build and test economic models.
▪︎It helps us to develop some form of understanding of economic mechanisms.
▪︎It allows us to form a basic understanding and principle by which we can build on.

Conclusion
Although the real world is generally too messy to test economic theories that rely on Ceteris Paribus assumptions, there are ways to get around this. Behavioral economists design experiments that essentially create Ceteris Paribus conditions within a controlled laboratory setting. Participants in the experiments are asked to make decisions under certain conditions. The experiments is then able to isolate the direct effects of policy changes by altering one condition at a time while holding all else equal: Ceteris Paribus!.

1a). Positive economics describes and explains various economic phenomena. But
Normative economics focuses on the value of economic fairness, or what the economy “should be” or “ought to be.” While positive economics is based on fact and cannot be approved or disapproved, normative economics is based on value judgements.
Positive economics is called the “what is” branch of economics. While
Normative economics, on the other hand, is considered the branch of economics that tries to determine the desirability of different economic programs and conditions by asking what “should” or what “ought” to be

2.) Ceteris paribus, literally “holding other things constant,” is a Latin phrase that is commonly translated into English as “ALL THINGS BEING EQUAL”
Practically mainstream economic thinking, it acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same (constant).
In the scientific sense, if we claim that one variable influences another, ceteris paribus, we are essentially controlling for the effects of some other variables.
Ceteris paribus is related to demand as if everything related to demand varies too often. Therefore, the uncertainty in demand will be quite large, like if cancer becomes the cause of monkeypox due to eating chicken.

NAME: IDIKA DIVINE UDUMA
DEPARTMENT: NURSING SCIENCE
REG NO: 2021/244496

1. Positive Economics is the study of what and why an economy operates as it does. It is also known as Descriptive economics and is based on facts which can be subjected to scientific analysis in order for them to be accepted.
It is based on factual information and uses statistical data, and scientific formula in determining how an economy should be. It deals with the relationship between cause and effect and can be tested. While;

Normative Economics is the study of how the economy should be. It is also known as Policy economics wherein normative statements like opinions and judgments are used. It determines the ideal economy by discussion of ideas and judgments.
In normative economics, people state their opinions and judgments without considering the facts. They make distinctions between good and bad policies and the right and wrong courses of action by using their judgments.

2. Ceteris paribus, literally “holding other things constant,” is a Latin phrase that is commonly translated into English as “all else being equal.” It acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same (constant).
Examples:
a. If the price of milk increases, people will buy less milk.
b. When the minimum wage increase (ceteris paribus), demand for such workers will decrease. The logic is that employers will have to pay their employees more, so will hire fewer of them.

1a). Positive economics describes and explains various economic phenomena. But
Normative economics focuses on the value of economic fairness, or what the economy “should be” or “ought to be.” While positive economics is based on fact and cannot be approved or disapproved, normative economics is based on value judgements.
B. Positive economics is called the “what is” branch of economics. While
Normative economics, on the other hand, is considered the branch of economics that tries to determine the desirability of different economic programs and conditions by asking what “should” or what “ought” to be

2. Ceteris paribus, literally “holding other things constant,” is a Latin phrase that is commonly translated into English as “ALL THINGS BEING EQUAL”
Practically mainstream economic thinking, it acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same (constant). In the scientific sense, if we claim that one variable influences another, ceteris paribus, we are essentially controlling for the effects of some other variables.
Ceteris paribus is related to demand as if everything related to demand varies too often. Therefore, the uncertainty in demand will be quite large, like if cancer becomes the cause of monkeypox due to eating chicken.

1a). Positive economics describes and explains various economic phenomena. But
Normative economics focuses on the value of economic fairness, or what the economy “should be” or “ought to be.” While positive economics is based on fact and cannot be approved or disapproved, normative economics is based on value judgements.
B). Positive economics is called the “what is” branch of economics. While
Normative economics, on the other hand, is considered the branch of economics that tries to determine the desirability of different economic programs and conditions by asking what “should” or what “ought” to be

2. Ceteris paribus, literally “holding other things constant,” is a Latin phrase that is commonly translated into English as “ALL THINGS BEING EQUAL”
Practically mainstream economic thinking, it acts as a shorthand indication of the effect of one economic variable on another, provided all other variables remain the same (constant). In the scientific sense, if we claim that one variable influences another, ceteris paribus, we are essentially controlling for the effects of some other variables.
Ceteris paribus is related to demand as if everything related to demand varies too often. Therefore, the uncertainty in demand will be quite large, like if cancer becomes the cause of monkeypox due to eating chicken

Offordile Divine Favour. C.
Nursing sciences
2021/242479

Answer to no 1
1) positive economics is a stream of economics that focuses on the description, quantification and explanation of economic development,expectation and associated phenomena WHILE Normative economics focuses on value based judgement aimed at improving economic development , investment,projects and the distribution Of wealth.

2) positive economics is objective and fact based where the statements are precise,descriptive and clearly measurable whereas the normative economics is subjective and value based originating from personal perspective or opinions involved in the decision making processes.

3)The statements of positive economics can be scientifically tested and it’s validity proved or disapproved whereas normative economics analyse and examine methodically and in detail typically inorder to explain and interprete it.

4) positive economics clearly define economic issues whereas normative economics provides remedies to economic issues on the basis of value judgement.

Answer to no 2
The concept of ceterius paribus according to economics is a broad term that defines that variables are changing or remaining the same on a given situation often to isolate only one variable,economists cite ceterius paribus to clarify that their assumptions on a given outcome are only valid if all other variables are remaining the same.
PRACTICAL EXAMPLES
1)if the price of milk falls ,ceterius paribus the demand for milk will rise
2)if the United States drilled for oil off its own shores,ceterius paribus the price of gasoline would drop.
3)if government prints more money,ceterius paribus interest rates will go up-this means that a higher supply of money will lead to inflation which increases interest rates
4)if the minimum wage increases,ceteris paribus unemployment rates will rise-he assumption here is that employers who pay their workers higher wages can’t afford to hire more employees.

No 1
1A. Positive economic is a branch of economic that is based on data and facts While Normative economic on the other hand is a branch of economic based on value, opinions and judgement.
1B. Positive economic analysis causes and effect relationship While Normative economic passes value judgement.
1C. Positive economic is the study of what it actually is While Normative economic is the study of what it ought to be.
1D. The statement on positive economic can be tested using scientific methods While The statement on Normative economic cannot be tested.
1E. The nature of positive economic is descriptive, that is gives a detailed account While Normative economic is prescriptive that is pertaining to give directives.

No 2
A practical example that analysis the concept of ceteris paribus is the economic law of supply which states that an increase in price results in an increase in quantity supplied, when keeping other factors constant. Using this economists can focus solely on the two factors involved price and supply.

NORMATIVE ECONOMICS
Normative economics is a discipline which seeks to provide rigorous basis for ethical decisions in the private and public sectors.
Normative economics is concerned with explaining what is good for society, and identifying the principles by which these decisions should be made

POSITIVE ECONOMICS
Positive economics is the term used for a strand of economics that seeks to highlight the economic benefits of publicly and privately funded activities, as well as aiming to counteract the perceived negative seide-effects of economic stimulus programmes

CETERIS PARIBUS
Every “ceteris PARIBUS” phrase has its own meaning. For example, “if it doesn’t rain, there Will be no flowers” likely means that if it doesn’t rain, there won’t be as much moisture in the air, which means that the flowers won’t grow as well. “Judge not,t that ye be not judged” means that you should not form opinions about others based on what you see. “Give unto him that asketh thee” means that you you should help those who need it. “When you do good, do not expect to receive credit for it” means that you should not expect people to appreciate your good deeds. “An eye for an eye, and a tooth for a tooth” means that you should not take revenge, because that will only make the situation worse. “You cannot serve two masters” means that you can’t be loyal to two different people or organisations.