Chapter 2: Problem 7
Would a research study on the effects of soft drink consumption on children’s cognitive development be a positive or normative statement?
Chapter 2: Problem 7
Would a research study on the effects of soft drink consumption on children’s cognitive development be a positive or normative statement?
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Get started for freeWhat are the similarities between a consumer’s budget constraint and society’s production possibilities frontier, not just graphically but analytically?
Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.
Suppose Alphonso’s town raises the price of bus tickets from \(0.50 to \)1 and the price of burgers rises from \(2 to \)4. Why is the opportunity cost of bus tickets unchanged? Suppose Alphonso’s weekly spending money increases from \(10 to \)20. How is his budget constraint affected from all three changes? Explain.
What is the difference between a positive and a normative statement?
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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