question
scientific method
answer
the dispassionate development and testing of theories about how the world works.
question
model
answer
a highly simplified representation of a more complicated reality.
question
circular-flow diagram
answer
visual model of the economy, shows how dollars flow through markets among households and firms.
question
factors of production
answer
the resources the economy uses to produce goods and services.
labor, land, and capital.
this is what firms do
labor, land, and capital.
this is what firms do
question
Households
answer
own the factors of production and consume all the G + S that the firms produce
question
production possibilities frontier
answer
a graph that shows the combinations of two goods the economy can possibly produce given the available resources and technology.
question
slope of the PPF.
rise/run
rise/run
answer
how to find the opportunity cost of an item using PPF
question
microeconomics
answer
the study of how households and firms make decisions and how they interact in markets
question
macroeconomics
answer
the study of economy-wide phenomena, including inflation, unemployment, and economic growth.
question
positive statements
answer
attempt to describe the world as it is
question
normative statements
(opinion, can not be refuted)
(opinion, can not be refuted)
answer
attempt to describe how the world should be.
question
Firms
answer
...
question
market for G + S
answer
households are buyers, and firms are sellers. Households buy the output of G + S that firms produce
question
markets for the factors of production
answer
household are sellers and firms are buyers. Households provide the inputs that firms use to produce goods and services
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
