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a simplified representation of some aspect of the economy
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An economic model is
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households are sellers, and firms are buyers
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The circular-flow diagram illustrates that, in markets for the factors of production,
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feasible but not efficient
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A point inside the production possibilities frontier is
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move the economy along the production possibilities frontier
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An economy produces hot dogs and hamburgers. If a discovery of the remarkable health benefits of hot dogs were to change consumers' preferences, it would
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All of the following topics fall within the study of microeconomics EXCEPT
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the influence of the government budget deficit on economic growth
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Law X will reduce national income
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Which of the following is a positive, rather than a normative, statement?
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A point outside the production possibilities frontier is unobtainable - it is not possible to produce this combination of goods
A point within the PPF is feasible but inefficient - the economy is not producing all that it is capable of.
A point within the PPF is feasible but inefficient - the economy is not producing all that it is capable of.
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Imagine a society that produces military goods and consumer goods, which we'll call "guns" and "butter.": Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient
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If both Hawks and Doves reduced their desired quantity of guns by the same amount, the Hawks would get a bigger peace dividend because the production possibilities frontier is much flatter at points producing more guns (guns on the vertical axis). As a result, the reduction of a given number of guns, starting at this high point, leads to a much larger increase in the quantity of butter produced than when starting at where a low level of guns is already being produced.
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Imagine a society that produces military goods and consumer goods, which we'll call "guns" and "butter.": Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger "peace dividend," measured by the increase in butter production? Explain.
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