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?
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?
What is productive efficiency? Allocative efficiency?
What are the similarities between a consumer's budget constraint and society's production possibilities frontier, not just graphically but analytically?
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