Explain the difference between a positive and normative
statement. Give an example of each type of statement.
How can an economy achieve points that are outside the
production possibilities curve?
Review the Spillover Principle. Give an example of a good
with a positive externality and a good with a negative externality (not
mentioned in the online text). What are the best ways to allocate goods with
externalities?
Do some research on your own on public goods. What are the
two main characteristics of this type of good? What is the biggest
“problem” with allocating public goods? Do you think the government
should have a role in allocating public goods, or should goods be privatized?
Be sure to support your answer with references.
