Critical Thinking Questions
make a choice below it. 14 . What are diminishing marginal returns? 15 . What is ? ? 16 . What is the difference between a positive and a ? 17 . Is the economic of decision-making intended as a literal description of how individuals, firms, and the governments actually make decisions? 18 . What are four responses to the that people should not behave in the way described in this chapter?
Critical Thinking Questions
19 . Suppose Alphonso’s town raises the of bus tickets from $0.50 to $1 and the of burgers rises from $2 to $4. Why is the of bus tickets unchanged? Suppose Alphonso’s weekly spending increases from $10 to $20. How is his affected from all three changes? Explain. 20 . During the Second World War, Germany’s factories were decimated. It also suffered many human casualties, both soldiers and civilians. How did the war affect Germany’s possibilities curve? 21 . 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? 22 . What assumptions about the economy must be true for the to work? To what extent are those assumptions valid in the real world? 23 . 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?
Problems
Use this information to answer the following 4 questions: Jade has a weekly budget of $24, which she likes to spend on magazines and pies. 24 . If the of a magazine is $4 each, what is the maximum number of magazines she could buy in a week? 25 . If the of a pie is $12, what is the maximum number of pies she could buy in a week? 26 . Draw Jade's with pies on the horizontal axis and magazines on the vertical axis. What is the slope of the ? 27 . What is Jade's of purchasing a pie?
Text from Principles of Microeconomics 3e, OpenStax, licensed CC BY-NC-SA 4.0. Access for free at openstax.org.
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