Chapter 2: Problem 13
Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.
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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Get started for freeUse this information to answer the following 4 questions: Marie has a weekly budget of \(\$ 24,\) which she likes to spend on magazines and pies. Draw Marie's budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of the budget constraint?
Is the economic model of decision-making intended as a literal description of how individuals, firms, and the governments actually make decisions?
What is the difference between a positive and a normative statement?
Individuals may not act in the rational, calculating way described by the economic model of decision making, measuring utility and costs at the margin, but can you make a case that they behave approximately that way?
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 pie is \(\$ 12,\) what is the maximum number of pies she could buy in a week?
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