【正文】 it would only move from one point to another along the same supply curve.4. If the pric。ve been tried in practice. For example, many economists thought that wage and price controls would be a good idea for keeping inflation under control, while others thought it was a bad idea. But when the controls were tried in the early 1970s, the results were disastrous. The controls interfered with the invisible hand of the marketplace and shortages developed in many markets. As a result, most economists are now convinced that wage and price controls are a bad idea for controlling inflation.But it is unlikely that the differences between economists will ever be pletely eliminated. Economists differ on too many aspects of how the world works. Plus, even as some policies get tried out and are either accepted or rejected, creative economists keep ing up with new ideas.UNIT4SOLUTIONS TO TEXT PROBLEMS:Quick Quizzes1. A market is a group of buyers (who determine demand) and a group of sellers (who determine supply) of a particular good or service. A petitive market is one in which there are many buyers and many sellers of an identical product so that each has a negligible impact on the market price.2. Here’s an example of a demand schedule for pizza:Price of Pizza SliceNumber of Pizza Slices Demanded $ 109876543210 The demand curve is graphed in Figure 1. Figure 1 Examples of things that would shift the demand curve include changes in ine, prices of related goods like soda or hot dogs, tastes, expectations about future ine or prices, and the number of buyers. A change in the price of pizza would not shift this demand curve。positive analysis. Since you are the president, you are the one who has to make the normative statements as to what should be done, with an eye to the political consequences. The normative statements made by economists represent their own views, not necessarily your views or the electorate’s views.10. There are many possible answers.11. As of this writing, the chairman of the Federal Reserve is Alan Greenspan, the chair of the Council of Economic Advisers is R. Glen Hubbard, and the secretary of the treasury is Paul H. O’Neill.12. As time goes on, you might expect economists to disagree less about public policy because they will have opportunities to observe different policies that are put into place. As new policies are tried, their results will bee known, and they can be evaluated better. It39。d be interested in both the positive and normative views of economists, but you39。negative ine tax.39。s decision about how many workers to hire is microeconomics.e. The relationship between the inflation rate and changes in the quantity of money is macroeconomics.7. a. The statement that society faces a shortrun tradeoff between inflation and unemployment is a positive statement. It deals with how the economy is, not how it should be. Since economists have examined data and found that there is a shortrun negative relationship between inflation and unemployment, the statement is a fact, thus it is a positive statement.b. The statement that a reduction in the rate of growth of money will reduce the rate of inflation is a positive statement. Economists have found that money growth and inflation are very closely related. The statement thus tells how the world is, and so it is a positive statement.c. The statement that the Federal Reserve should reduce the rate of growth of money is a normative statement. It states an opinion about something that should be done, not how the world is.d. The statement that society ought to require welfare recipients to look for jobs is a normative statement. It doesn39。the productivity of the environmental industry. Gains in environmental productivity, such as the development of a noemission auto engine, lead to shifts of the productionpossibilities frontier, like the shift from PPF1 to PPF2 shown in the figure.Figure 76. a. A family39。 the four transactions are shown.Figure 54. a. Figure 6 shows a production possibilities frontier between guns and butter. It is bowed out because when most of the economy’s resources are being used to produce butter, the frontier is steep and when most of the economy’s resources are being used to produce guns, the frontier is very flat. When the economy is producing a lot of guns, workers and machines best suited to making butter are being used to make guns, so each unit of guns given up yields a large increase in the production of butter. Thus, the production possibilities frontier is flat. When the economy is producing a lot of butter, workers and machines best suited to making guns are being used to make butter, so each unit of guns given up yields a small increase in the production of butter. Thus, the production possibilities frontier is steep. b. Point A is impossible for the economy to achieve。t need any cows, then production is unaffected. But if the economy produces any milk at all, then there will be less production possible after the disease hits.Figure 35. The idea of efficiency is that an oute is efficient if the economy is getting all it can from the scarce resources it has available. In terms of the production possibilities frontier, an efficient point is a point on the frontier, such as point A in Figure 4. A point inside the frontier, such as point B, is inefficient since more of one good could be produced without reducing the production of another good.Figure 46. The two subfields in economics are microeconomics and macroeconomics. Microeconomics is the study of how households and firms make decisions and how they interact in specific markets. Macroeconomics is the study of economywide phenomena.7. Positive statements are descriptive and make a claim about how the world is, while norma