Assignment:
Questions:
1. "In effect, the production possibilities frontier plays the same role for society as the budget constraint plays for Alphonso." Which sentence does this quotation echo from the previous paragraphs?
2. What is productive efficiency? Allocative efficiency?
3. What does point R Productive and Allocative Efficiency represent to you?
4. Under what kinds of conditions a point can be outside of a PPF curve?
5. What is the difference between a positive and anormative statement?
6. "Clearly, individuals are both self-interested and altruistic." Do you agree with this statement? Why or why not? Please provide specific example(s) to support your position.
7. Is the economic model of decision-making intendedas a literal description of how individuals, firms, and thegovernments actually make decisions?
8. What are four responses to the claim that peopleshould not behave in the way described in this chapter?
9. What does the "invisible hand" mean based on the reading?
10. During the SecondWorldWar, Germany's factorieswere decimated. It also suffered many human casualties,both soldiers and civilians. How did the war affectGermany's production possibilities curve?
11. It is clear that productive inefficiency is a wastesince resources are being used in a way that producesless goods and services than a nation is capable of. Whyis allocative inefficiency also wasteful?
12. What assumptions about the economy must be truefor the invisible hand to work? To what extent are thoseassumptions valid in the real world?
13. Do economists have any particular expertise atmaking normative arguments? In other words, they haveexpertise at making positive statements (i.e., what willhappen) about some economic policy, for example, butdo they have special expertise to judge whether or notthe policy should be undertaken?
Attachment:- Production Possibilities Frontier.rar