Chapter 2: Q. 6 (page 43)
Would an op-ed piece in a newspaper urging the adoption of a particular economic policy be a positive or
normative statement?
It is a normative statement.
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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 are diminishing marginal returns?
What does a production possibilities frontier
illustrate?
What is comparative advantage?
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?
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