Unformatted text preview: -We are interested in models that make clear, testable predictions.-A key assumption is that individuals allocate their scarce resources so as to make themselves as well off as possible.-Positive statement: a testable hypothesis about cause and effect. Concerns what will happen.-Normative statement: a conclusion as to whether something is good or bad. Concerns what should happen.-A policy debate will be more informed if positive analyses are conducted first....
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- Spring '07
- -An economic model, -A key assumption, -A policy debate