17.Is the economic model of decision-making intended as a literal description of how individuals, firms, and the governments actually make decisions?

18.What are four responses to the claim that people should not behave in the way described in this chapter?

19.Suppose Alphonso's town raises the price of bus tickets from $0.50 to $1 and the price of burgers rises from $2 to $4. Why is the opportunity cost of bus tickets unchanged? Suppose Alphonso's weekly spending money increases from $10 to $20. How is his budget constraint affected from all three changes? Explain.

20.During the Second World War, Germany's factories were decimated. It also suffered many human casualties, both soldiers and civilians. How did the war affect Germany's production possibilities curve?

21.It is clear that productive inefficiency is a waste since resources are used in a way that produces less goods and services than a nation is capable of. Why is allocative inefficiency also wasteful?

22.What assumptions about the economy must be true for the invisible hand to work? To what extent are those assumptions valid in the real world?

23.Do economists have any particular expertise at making normative arguments? In other words, they have expertise at making positive statements (i.e., whatwillhappen) about some economic policy, for example, but do they have special expertise to judge whether or not the policyshouldbe undertaken?

Use this information to answer the following 4 questions: Marie has a weekly budget of $24, which she likes to spend on magazines and pies.

24.If the price of a magazine is $4 each, what is the maximum number of magazines she could buy in a week?

25.If the price of a pie is $12, what is the maximum number of pies she could buy in a week?

26.Draw Marie's budget constraint with pies on the horizontal axis and magazines on the vertical axis. What is the slope of the budget constraint?

27.What is Marie's opportunity cost of purchasing a pie?