Chapter 2: Problem 16
What is the difference between a positive and a normative statement?
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Chapter 2: Problem 16
What is the difference between a positive and a normative statement?
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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?
What are diminishing marginal returns?
Explain why scarcity leads to tradeoffs.
Use this information to answer the following 4 questions: Marie has a weekly budget of \(24, which she likes to spend on magazines and pies. If the price of a magazine is \)4 each, what is the maximum number of magazines she could buy in a week?
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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