Your salary is $500 less than the national average. Your salary should be much more than it is now.

While both the statements above are part of the study of economics (e.g. in labour theory), they are fundamentally different. The former is known as a positive statement, while the latter is known as a normative statement.

As you would have been able to note, the first statement is one of fact. You could easily verify that statement by looking up the national salary average and comparing it with your own salary. No one can dispute that statement because you can point them to cold, hard truth.

So, this means that positive economics is concerned with economic facts that can be verified. Positive economics is descriptive. This means you can illustrate positive economics with facts. Positive statements can be disputed by appealing to the appropriate facts. This means you can argue positive economics objectively, and without value judgment.

The second statement, on the other hand, is a subjective and value-based one. You cannot conclusively verify or support it simply because it is something that should or ought to happen. It is not something that has happened or is happening. Anyone with a reasonable alternative viewpoint can dispute that statement. For example, during a recession when your salary has been cut, your wife might believe that your salary should be much higher than it is now. But your boss could very well think the opposite since cost-cutting is one of the few ways to survive in such a demand-deficient situation¹.

1. recessions are generally marked by a substantial lack of demand for products and services, and thus, firms suffer from a lack of sales which is usually balanced by cutting cost [↩]