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Pearson Edexcel IAL Economics 1.3.1.2a distinction between positive stat

Practise separating factual economic claims from value judgements in extracts about pollution, taxes, healthcare and public policy.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
AS

Exam points

  • classify extract statements as positive or normative using evidence in context
  • explain the difference between testable facts and value judgements in policy claims

1.3.1.2a - distinction between positive statements and value normative judgements on economic question 1

[Maximum number: 4]

Sources for use with Section C
Cotton and clothing

Figure 1 World price of cotton, $ per lb, April 2020 to January 2021

Figure 1 World price of cotton, $ per lb, April 2020 to January 2021

Extract A World cotton price rises

Between 1 April 2020 and 1 January 2021 the demand for face masks, bedsheets and surgical gowns increased. All require cotton in their production. During the same period there was a reduced cotton crop in Pakistan, the world’s fourth largest supplier. High temperatures resulted in a decrease in the amount of cotton produced. Both these factors caused an increase in the price of cotton.

Extract B Clothing manufacturers should reduce environmental costs

Clothing retailers and manufacturers earn $2.4 billion globally and directly employ 75 million people. The clothing industry is the world’s third largest manufacturing sector.

The manufacture of clothing involves significant environmental costs. For example, on average, producing one pair of jeans requires 3 781 litres of water and creates 33.4 kg of carbon emissions. This includes the production of the cotton through to the delivery of the final product to stores.

According to the United Nations, each year clothing manufacturers use 93 billion cubic metres of water; 20% of all wastewater comes from clothes dyeing by manufacturers; after use, 87% of clothing is burnt or disposed of in landfill; and clothing manufacturers produce 10% of annual global carbon emissions. This is more than all international flights and shipping combined.

Clothing retailers used to have four seasonal clothing ranges per year. However, many clothing stores now offer new ranges weekly. Between 2000 and 2020 the number of clothing items produced yearly increased from 50 billion to 100 billion. In 2019 a person bought, on average, 60% more clothing than in 2000 and more items of clothing are thrown away. Less than 1% of used clothing is recycled into new garments.

In response to the environmental damage caused by the clothing industry, Ireland’s Government is considering the introduction of an indirect tax on clothing.

Extract C Indian Government to remove clothing subsidy

India employs 35 million workers in clothing manufacturing. Clothing accounts for 12% of India’s exports. To protect this important industry the Indian Government used to pay a subsidy to clothing manufacturers. However, the US Government and the Turkish Government argued that this gave Indian manufacturers an unfair advantage. Consequently the Indian Government removed this subsidy in 2018.

With reference to the titles of Extract A and Extract B, explain the difference between positive statements and normative statements.

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