Economics Production Possibility Frontier Questions Medium
A positive statement about the Production Possibility Frontier (PPF) describes what is currently possible or observable in terms of production and resource allocation. It focuses on facts, data, and cause-and-effect relationships. For example, a positive statement about the PPF could be "An economy is currently producing at a point inside its PPF, indicating that resources are underutilized."
On the other hand, a normative statement about the PPF expresses an opinion or value judgment about how the economy should allocate its resources or produce goods and services. It involves subjective judgments and personal preferences. For instance, a normative statement about the PPF could be "The economy should allocate more resources towards education and healthcare, even if it means sacrificing some production of luxury goods."
In summary, the key difference between a positive and a normative statement about the PPF lies in their nature - positive statements focus on describing what is, while normative statements express what should be.