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AK_Chapter_02 - Doves = a lot of butter and few guns d...

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1 Chapter 2 Questions for Review 1. Economists use the scientific method . 2. To simplify problems. 3. No. 4. The PPF intercept on “Milk” axis decreases if cows killed. The other intercept (cookies) does not change. 5. A point on the frontier. 6. Microeconomics and macroeconomics. 7. Positive = how the world is (descriptive), normative = how the world ought to be (prescriptive). 9. 1) economists may have different positive theories; 2) economists may have different values = different normative views. Problems and Applications 1. Many answers are possible. 2. a. Reasonable. b. Not reasonable. c. Reasonable. d. Reasonable (usually). 3. See Figure 1. 4. a. “Bowed-out.” b. Outside the production possibilities frontier = impossible. Inside the production possibilities frontier = inefficient. c. Hawks = many guns and not much butter.
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Unformatted text preview: Doves = a lot of butter and few guns. d. Hawks would get a bigger peace dividend. 2 Figure 1 5. Cleanliness of environment on one axis; industrial output on another. The vertical intercept on “Cleanliness” would move out with no-emission engine. 6. a. microeconomics. b. microeconomics. c. macroeconomics. d. microeconomics. e. macroeconomics. 7. a. positive. b. positive. c. normative. 3 d. normative. e. positive. 8. Normative: 5, 9. Positive: all other. 9. M ore interested in their positive views. 10. There are many possible answers. 10. Most are not economists. It should matter for their understanding of what they do to the rest of us. 12. Probably less: as some policies are tried, effects will be observed and some disagreements settled. It’s unlikely that the differences will ever be completely eliminated....
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AK_Chapter_02 - Doves = a lot of butter and few guns d...

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