1) Draw and explain a production possibilities frontier for an economy that produces milk and cookies. What happens to this frontier if disease kills half of the economy’s cow population?
2) What is the difference between a positive and a normative statement? Give an example of each.
Chapter 3 Interdependence and the Gains from Trade 1) Explain how absolute advantage and comparative advantage differ.
2) Will a nation tend to export or import goods for which it has a comparative advantage? Explain.
