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 are diminishing marginal returns?
Do economists have any particular expertise at making normative arguments? In other words, they have expertise at making positive statements (i.e., what will happen) about some economic policy, for example, but do they have special expertise to judge whether or not the policy should be undertaken?
During the Second World War, Germany's factories were decimated. It also suffered many human casualties, both soldiers and civilians. How did the war affect Germany's production possibilities curve?
Explain why individuals make choices that are directly on the budget constraint, rather than inside the budget constraint or outside it.
It is clear that productive inefficiency is a waste since resources are used in a way that produces less goods and services than a nation is capable of. Why is allocative inefficiency also wasteful?
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