Chapter 2: Problem 13
Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.
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Chapter 2: Problem 13
Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.
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What is the difference between a positive and a normative statement?
What assumptions about the economy must be true for the invisible hand to work? To what extent are those assumptions valid in the real world?
What are the similarities between a consumer's budget constraint and society's production possibilities frontier, not just graphically but analytically?
Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?
Explain why individuals make choices that are directly on the budget constraint, rather than inside the budget constraint or outside it.
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