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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

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BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

In what sense is economics like a science? • Draw a production possibilities frontier for a society that produces food and clothing. Show an efficient point, an inefficient point, and an infeasible point. Show the effects of a drought. • Define microeconomics and macroeconomics.

To determine
The nature of economics.

Explanation

The subject economics is like science. This is because economics is based on scientific methods and theories. Economists develop a theory only after scientific analysis. They collect necessary data and analyze them to verify their theory. Thus, economics is like science.

Figure 1 shows the production possibility frontier for the production of food and cloth.

The vertical axis of Figure 1 measures the quantity of clothing produced in a society and the horizontal axis measures the quantity of food produced. In the diagram, there are three points A, B, and C. A is the efficient point in the frontier and B and C are the inefficient and infeasible points, respectively.

Figure 2 shows effect of drought on the production of food and cloth...

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