Skip to ContentGo to accessibility pageKeyboard shortcuts menu
OpenStax Logo
Principles of Macroeconomics 2e

Review Questions

Principles of Macroeconomics 2eReview Questions
8.

Explain why scarcity leads to tradeoffs.

9.

Explain why individuals make choices that are directly on the budget constraint, rather than inside the budget constraint or outside it.

10.

What is comparative advantage?

11.

What does a production possibilities frontier illustrate?

12.

Why is a production possibilities frontier typically drawn as a curve, rather than a straight line?

13.

Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.

14.

What are diminishing marginal returns?

15.

What is productive efficiency? Allocative efficiency?

16.

What is the difference between a positive and a normative statement?

17.

Is the economic model 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 claim that people should not behave in the way described in this chapter?

PreviousNext
Order a print copy
Citation/Attribution

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Attribution information
  • If you are redistributing all or part of this book in a print format, then you must include on every physical page the following attribution:
    Access for free at https://openstax.org/books/principles-macroeconomics-2e/pages/1-introduction
  • If you are redistributing all or part of this book in a digital format, then you must include on every digital page view the following attribution:
    Access for free at https://openstax.org/books/principles-macroeconomics-2e/pages/1-introduction
Citation information

© Jun 15, 2022 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.