question_answer

                               Explain the concept of economics as a positive science and economics as a normative science. Or Explain the central problem of 'choice of technique'?

Answer:

            Economics as a Positive Science A positive science is that science in which analysis is confined to cause and effect relationship. It simply states, 'what is' and not 'what ought to be'. It does not pass any value judgement regarding what is right or wrong. Positive economics is concerned with the facts about the economy, as they exist. e.g. positive economics deals with questions like 'what are the causes of unemployment', 'why prices are increasing' and so on.                                                                      Economics as a Normative Science Economics as a normative science is concerned with 'what ought to be'. It examines real economic events from moral and ethical angles and judges whether certain economic events are desirable or not. It passes value judgement and prescribes methods to correct undesirable happenings. e.g. normative economics deals with opinions like 'old-age pension should be stopped', 'MGNREGA will bring an end to unemployment' and so on.  Or 'Choice of technique' is the problem of "How to produce'? 'How to produce'? is the problem which refers to the problem relating the choice of technique. Broadly, there are two techniques of production: (i) Labour-intensive technique and             (ii) capital intensive technique. Labour-intensive technique uses more of labour than capital (machines) and is cost effective, whereas capital-intensive technique uses more of capital (machines) than labour and promotes efficiency. So, a business firm needs to choose among these two techniques such that it obtains a cost-effective as well as efficient relationship.