1)Answer the following question.

a) Distinguish between a positive statement and a normative statement and provide examples .

b)How do economists try to disentangle cause and effect?

c)How does the production possibilities frontier illustrate scarcity?

d)How does the production possibilities frontier illustrate production efficiency?

e)How does the production possibilities frontier show that every choice involves a tradeoff? f)How does the production possibilities frontier illustrate opportunity cost?

g)Why does the PPF bow outward and what does that imply about the relationship between opportunity cost and the quantity produced?

2)

a)What is marginal cost? How is it measured?

b)What is marginal benefit? How is it measured?

c)How does the marginal benefit from a good change as the quantity produced of that good increases?

d)What is allocative efficiency and how does it relate to the production possibilities frontier?

e)What conditions must be satisfied if resources are used efficiently?