Reflections on Chapter 2: Thinking Like an Economist

1. The production possibilities frontier makes it easy to understand a concept that in words alone would be difficult for me to really comprehend. When looking at the data in a table form, I can more easily see the opportunity costs but answering questions about efficient, inefficient, and unfeasible points would be very difficult. When looking at the model, those questions are simple to answer. The circular-flow diagram really simplifies the economy in a way that makes it easy to understand. I don't consider myself a visual learner but obviously some concepts are easier to understand when modeled.

 2. Positive statement: Unemployment is up 1% from last year.
     Normative statement: The current administration needs to reduce unemployment by 1% in order to reverse the economic recession.

It is important to know that difference since one statement is based on fact (positive) and the other is based on opinion (normative). When forming your own opinion, when deciding on which candidate to vote for, for instance, it's imperative that you know which statements are fact and which are based on someone's opinion.