Chapter 1

• What is scarcity? Can you think of two causes of scarcity?

• What are the three main goals of macroeconomics?

• Why do you think that most modern countries' economies are a mix of command and market types?

Chapter 2

• Could a nation be producing in a way that is allocatively efficient, but productively inefficient?

• Explain why scarcity leads to tradeoffs.

• Explain why societies cannot make a choice above their production possibilities frontier and should not make a choice below it.

• What is productive efficiency? Allocative efficiency?

Mathematical Questions

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.

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

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

• 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?

openstax Principles of Macro eco nomics Be. Principles of Macroeconomics 3e SENIOR CONTRIBUTING AUTHORS DAVID SHAPIRO, PENNSYLVANIA STATE UNIVERSITY DANIEL MACDONALD, CALIFORNIA STATE UNIVERSITY, SAN BERNADINO STEVEN A. GREENLAW, UNIVERSITY OF MARY WASHINGTON openstax