1) Is Matt Yglesias engaging in normative or positive economic analysis when he

Question

1) Is Matt Yglesias engaging in normative or positive economic analysis when he says that government regulation leads to shortages and over-consumption?

2) Explain, in your own words, how Thakur Gas violated the New Jersey anti-price gauging law. Assume the price of gas before Sandy was $2.00 per gallon.

3) Was Thakur acting in its own interest or in the public interest when it sold gas? Was Thakur serving its own interest or the public interest when it sold gas?

4) Was Governor Christie acting in his own interest or in the public interest when he made his statements about enforcing anti-price gauging laws? Please explain.

5) Has the natural disaster changed the opportunity cost of a gallon of gas to the average consumer? (Hint: You want to answer “Yes”). What other goods can you think of have increased in opportunity cost due to the natural disaster? How might this change how you plan in the future for possibility of major weather events?

6) Has the natural disaster changed the opportunity cost of a gallon of gas to the average seller? (Hint: You want to answer “Yes”). What other goods can you think of have increased in opportunity cost due to the natural disaster?

7) Was Governor Christie able to change scarcity? Why or why not?

Sources:http://www.slate.com/articles/business/moneybox/2012/10/sandy_price_gouging_anti_gouging_laws_make_natural_disasters_worse.html

http://www.slate.com/blogs/moneybox/2012/11/01/gas_lines_in_new_jersey_the_state_needs_more_price_gouging.html

http://reason.com/archives/1996/12/01/gouge-away/print

http://business.time.com/2012/11/02/post-sandy-price-gouging-economically-sound-ethically-dubious/

Explanation / Answer

1..)

Positive economics is fact based and it can be tested. After testing, it can be proved or disproved. Conversely, normative economic is subjective and it is guided by the values or it is advisory in nature.

Statement given, talking about the proven results. Hence, it is positive economic analysis.

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