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Chapter 2 Reflection

1. The use of a very simplified model of the economy such as the production possibilities frontier helps explain the essence of a concept. For this particular model, it shows the combinations of outputs that an economy could choose to produce with its limited resources. It helped me see the trade off in opportunity cost. For example, make two toasters or one microwave. At a certain


2. I've often heard people saying that the minimum wage should be raised, or that there should be rent controls. These are both normative statements because they talk about actions that should be taken, rather than describe things as they actually are. It is important to make a distinction because one is objective and one is subjective. While everyone has a personal perspective and ideals, most normative statements have unintended consequences.

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