What type of economic analysis is concerned with the way things ought to be? A. Rational Behavior B. Normative Analysis C. Marginal Analysis D. Positive Analysis

The correct answer is: **B. Normative Analysis** ### Explanation: **Normative Analysis** is concerned with what *ought* to be. It involves value judgments and opinions about economic policies or outcomes, prescribing how the economy should work or what policies should be implemented based on subjective criteria. Let's briefly differentiate it from the other options: - **A. Rational Behavior**: This concept assumes that individuals make decisions by logically weighing the costs and benefits to maximize their utility. It's a foundational assumption in many economic models but doesn't directly address what ought to be. - **C. Marginal Analysis**: This involves examining the additional benefits and costs of a decision. It's a tool used in both positive and normative analyses but isn't itself a type of analysis regarding how things should be. - **D. Positive Analysis**: Unlike normative analysis, positive analysis focuses on describing and explaining economic phenomena without making judgments. It deals with *what is* rather than what *should be*. **In summary**, normative analysis is the type of economic analysis that deals with prescriptive statements about how the economy should function or what policies should be adopted based on certain values or criteria.