normative statement?

7. Would a research study on the effects of soft drink consumption on children’s cognitive development be a

positive or normative statement?

Review 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?

Access for free at openstax.org
2 • Critical Thinking Questions 45

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?
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