Economics Agents + Positive and Normative Economics
This note will break down the Economics Agents based on the Econ CAPE Syllabus.
Author:Krish Beachoo
Edu Level: Unit1
Date: Mar 31 2026 - 10:15 AM
⏱️Read Time:
What are the Three Economic Agents
- FIRMS/BUSINESS
- GOVERNMENT
- HOUSEHOLDS/INDIVIDUALS
How to solve the basic economic problem of Scarcity?
You must ask 3 Questions:
- WHAT to produce?
- HOW MUCH to produce?
- FOR WHOM to produce?
POSITIVE & NORMATIVE ECONOMICS
Positive Statement
This is a statement about "What is", "What was" and "What will be". That is a statement based on FACT.
Example: The employment rate in Trinidad increased from 10% to 18%.
Normative Statement
This is a statement that depends on value of judgement. They are based on PERSONAL OPINION and NOT FACT. Normative Statements are views on "What does", "Might" or "Should" or "Could" happen.
Example: In today's world, people should save more.
Questions
CORRECT ANSWER: NORMATIVE
Is the statement:
Government workers should receive free health care.
Normative or Positive?
CORRECT ANSWER: POSITIVE
Is the statement:
A rise in minimum wage will reduce the demand for workers
Normative or Positive?
CORRECT ANSWER: POSITIVE - It can be tested.
Is the statement:
If interest rates rise, fewer people would be able to afford a mortgage.
Normative or Positive?
Read Next
Theory of Demand
Go to Content →Opportunity Cost
Go to Content →Production Possibility Frontier (PPF)
Go to Content →Economics Systems
Go to Content →
