- 2.1: Suppose Alphonsos town raised the price of bus tickets to $1 per tr...
- 2.2: Return to the example in Figure 2.4. Suppose there is an improvemen...
- 2.3: Could a nation be producing in a way that is allocatively efficient...
- 2.4: What are the similarities between a consumers budget constraint and...
- 2.5: Individuals may not act in the rational, calculating way described ...
- 2.6: Would an op-ed piece in a newspaper urging the adoption of a partic...
- 2.7: Would a research study on the effects of soft drink consumption on ...
- 2.8: Explain why scarcity leads to tradeoffs.
- 2.9: Explain why individuals make choices that are directly on the budge...
- 2.10: What is comparative advantage?
- 2.11: What does a production possibilities frontier illustrate?
- 2.12: Why is a production possibilities frontier typically drawn as a cur...
- 2.13: Explain why societies cannot make a choice above their production p...
- 2.14: What are diminishing marginal returns?
- 2.15: What is productive efficiency? Allocative efficiency?
- 2.16: What is the difference between a positive and a normative statement?
- 2.17: Is the economic model of decision-making intended as a literal desc...
- 2.18: What are four responses to the claim that people should not behave ...
- 2.19: Suppose Alphonsos town raises the price of bus tickets from $0.50 t...
- 2.20: During the Second World War, Germanys factories were decimated. It ...
- 2.21: It is clear that productive inefficiency is a waste since resources...
- 2.22: What assumptions about the economy must be true for the invisible h...
- 2.23: Do economists have any particular expertise at making normative arg...
- 2.24: If the price of a magazine is $4 each, what is the maximum number o...
- 2.25: If the price of a pie is $12, what is the maximum number of pies sh...
- 2.26: Draw Maries budget constraint with pies on the horizontal axis and ...
- 2.27: What is Maries opportunity cost of purchasing a pie?
Solutions for Chapter 2: Choice in a World of Scarcity
Full solutions for Principles of Economics | 2nd Edition
consumer price index (CPI)
a measure of the overall cost of the goods and services bought by a typical consumer
a study that compares the costs and benefits to society of providing a public good
a situation in which the market price has reached the level at which quantity supplied equals quantity demanded
spending on goods and services by local, state, and federal governments
transfers to the poor given in the form of goods and services rather than cash
the ratio of assets to bank capital
the study of economy-wide phenomena, including inflation, unemployment, and economic growth
a small incremental adjustment to a plan of action
negative income tax
a tax system that collects revenue from high-income households and gives subsidies to lowincome households
two goods with straight-line indifference curves
a legal maximum on the price at which a good can be sold
the business practice of selling the same good at different prices to different customers
the limited nature of society’s resources
an action taken by an uninformed party to induce an informed party to reveal information
an excess of imports over exports
Tragedy of the Commons
a parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole
a worker association that bargains with employers over wages, benefits, and working conditions
a measure of happiness or satisfaction
government programs that supplement the incomes of the needy welfare economics the study of how the allocation of resources affects economic well-being
willingness to pay
the maximum amount that a buyer will pay for a good