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1、1Q4Whyshouldpolicymakersthinkaboutincentives?Policymakersneedtothinkaboutincentivessotheycanunderstandhowpeoplewillrespondtothepoliciestheyputinplace.Thetext'sexampleofseatbeltsshowsthatpolicyactionscanhavequiteunintendedconsequences.Ifincentivesmatt
2、eralot,theymayleadtoaverydifferenttypeofpolicy;forexample,someeconomistshavesuggestedputtingknivesinsteeringcolumnssothatpeoplewilldrivemuchmorecarefully!Whilethissuggestionissilly,ithighlightstheimportanceofincentives.Q6whatdoestheinvisiblehandofthe
3、marketplacedo?The"invisiblehand"ofthemarketplacerepresentstheideathateventhoughindividualsandfirmsareallactingintheirownself-interest,pricesandthemarketplaceguidethemtodowhatisgoodforsocietyasawhole.2Q1Howiseconomicslikeascience?Economicsislikeascien
4、cebecauseeconomistsusethescientificmethod.Theydevisetheories,collectdata,andthenanalyzethesedatainanattempttoverifyorrefutetheirtheoriesabouthowtheworldworks.Economistsusetheoryandobservationlikeotherscientists,buttheyarelimitedintheirabilitytoruncon
5、trolledexperiments.Instead,theymustrelyonnaturalexperiments.Q5Useaproductionpossibilitiesfrontiertodescribetheideaof“efficiency”?Theideaofefficiencyisthatanoutcomeisefficientiftheeconomyisgettingallitcanfromthescarceresourcesithasavailable.Intermsoft
6、heproductionpossibilitiesfrontier,anefficientpointisapointonthefrontier,suchaspointAinFigure4.Apointinsidethefrontier,suchaspointB,isinefficientsincemoreofonegoodcouldbeproducedwithoutreducingtheproductionofanothergood.Q7Whatisthedifferencebetweenapo
7、sitiveandanormativestatement?Giveanexampleofthat.Positivestatementsaredescriptiveandmakeaclaimabouthowtheworldis,whilenormativestatementsareprescriptiveandmakeaclaimabouthowtheworldoughttobe.Hereisanexample.Positive:Arapidgrowthrateofmoneyisthecauseo
8、finflation.Normative:Thegovernmentshouldkeepthegrowthrateofmoneylow.3Q1Explainhowabsoluteadvantageandcomparativeadvantagediffer.Absoluteadvantagereflectsacomparisonoftheproductivityofoneperson,firm,ornationtothatofanother,whilecomparativeadvantageisb
