Introduction to Business EconomicsMTP Apr 19Question 582 of 209
All Questions

Questions like what should be the level of national income, what should be the wage rate fall within the scope of

Options

APositive Science
BNormative Science
CBoth (a) and (b)
DNone of the above
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Correct Answer

✅ Option b — Normative Science

All Options:

  • APositive Science
  • BNormative Science
  • CBoth (a) and (b)
  • DNone of the above

Detailed Solution & Explanation

• The question asks about what "should be" the level of national income or wage rate. This phrasing indicates a value judgment or a recommendation about what is desirable. • Normative economics deals with "what ought to be" or "what should be." It involves subjective statements, opinions, and policy prescriptions. For example, "The government should increase the minimum wage" is a normative statement. • Therefore, questions about ideal levels or desired outcomes fall squarely within the scope of Normative Science (or Normative Economics). • Option (A) Positive Science (or Positive Economics) is incorrect because it deals with "what is" or "what actually happens," focusing on factual statements and objective analysis that can be tested or verified. For example, "An increase in the minimum wage will lead to job losses" is a positive statement. The given question is not asking for a factual description but a recommendation. • Option (C) Both (a) and (b) is incorrect because the question's phrasing clearly points to a normative aspect, not a positive one. While positive economics might analyze the effects of different national income levels or wage rates, the question itself is about the *desired* level.

About This Chapter: Introduction to Business Economics

Paper

Paper 4: Business Economics

Weightage

5%

Key Topics

Meaning, Scope, Price Mechanism

This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.

View Official ICAI Syllabus

Exam Strategy Tip

Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.

Related Comparison Tables

Microeconomics vs Macroeconomics: The Complete CA Foundation GuidePositive vs Normative Economics: Fact vs Opinion

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