Economic Thinking

The circular flow diagram demonstrates Mathematical equations A trade-offs that scarcity imposes A direct relationship between groups in an economy

A direct relationship between groups in an economy

Due to limits on our time, money, and effort, we are best off when we allocate those things... According to what society as a whole would want With the objective of maximizing profit By constantly assessing the opportunity costs of our choice

By constantly assessing the opportunity costs of our choice

Because of our limited money, time, and effort, we are best off when we allocate those things With the objective of maximizing opportunity costs By choosing what society as a whole would want By constantly assessing the opportunity costs of our choices

By constantly assessing the opportunity costs of our choices

If a data line on a graph has a slope of zero it means there Is a constant relationship between x and y Are two variables that are negatively related Is no relationship between x and y

Is a constant relationship between x and y

If a graph data line indicates that there is a zero slope, this means there Is a constant relationship between x and y Are two variables that are negatively related Is no relationship between x and y

Is a constant relationship between x and y

Natural resources, or land, can include the fertility of the land, minerals below it, and what other aspects? Livestock Human capital resources Human Resources

Livestock

In a world of scarcity, we will never... Meet all of society's want Use all economic resources such that we satisfy the maximum amount of wants Satisfy all basic human needs

Meet all of society's want

Economic capital is productive, so it does not include Tools Money Buildings & equipment

Money

What is NOT included in economic capital? Building & equipment Money Tools

Money

When certain assumptions are used to create a model of reality, its value can be tested and determined by Predicting outcomes. Producing data. Graphing equations.

Predicting outcomes

When certain assumptions are used to create a model of reality, its value can be tested and determined by Producing Graphing equations Predicting outcomes

Predicting outcomes

Financial capital, like money, is simply a tool. Once financial capital is converted to economic capital (invested), it produces a resource that is Profitable Productive Expensive

Productive

Identify the microeconomic topic(s) among the following The price that a farmer asks for her watermelons Fiscal policy The unemployment rate

The price that a farmer asks for her watermelons

A common economic model that reveals a relationship between two types of groups interacting in marketing in an economy is called The circular flows diagram The supply & demand framework The production possibilities graph

The circular flows diagram

In the case of a direct relationship between two variables, all else remaining constant: The values of the two variables will move in the same direction The value of the two variables will move in opposite directions from each other Graphically, the data line representing the relationship between the variables has a positive slope.

The values of the two variables will move in the same direction Graphically, the data line representing the relationship between the variables has a positive slope.

Scarcity is a condition that is everywhere and always, since it is based upon two assumptions that reflect permanent universal conditions. The assumptions are that There are limited wants The world has limited productive resources More output satisfies more wants

The world has limited productive resources More output satisfies more wants

The very best models have an unusual combination of characteristics. They are both... Linear and inverse Useful and simple Graphical and numerical

Useful and simple

What combination of model characteristics are frequently used it the most effective models? Graphical and can be expressed as a mathematical function. Linear and inverse. Useful and simple.

Useful and simple

If a data line on a graph slopes upward as it goes to the right, it is depicted that The relationship between the variables on the axes is inverse The relationship between the variables on the axes is direct As the value of one variable falls, the value of the other rises

The relationship between the variables on the axes is direct