Chapter 2

How does the use of a very simplified model of the economy such as those found in a production possibilities frontier help you to understand the economy?

When I studied the model and read Chapter 2;  I put the information into my perspective as a consumer, and citizen. Basically I compared it to my own personal finance, shopping habits etc. Then once you take it from your own personal experience and perspective you can see how it relates starting in your own community and expanding outward into the sate, country, world etc. 

Give an example of a positive and normative statement about the economy. Why does it matter which is which?

An example of a positive statement would be: 

"Buying produce from Farmers Markets support small, local businesses". 

A positive statement attempts to describe things that are factual.

An example of a normative statement would be:

"Everyone should shop at Farmers Markets, to minimize pollution, increase their health benefits and put big grocery chains out of business".

A normative statement attempts to describe things as we think that they ought to be based on our personal beliefs, morals and opinions. 

So when economists make normative statements they can be acting more as policy advisers rather than going off of factual data.