Fundamentals (Macro)

In the circular flow model, ______ can obtain the income they need to buy the products they want to consume only by selling their resources.

consumers

On a production possibilities frontier (PPF) with Good X on the horizontal axis and Good Y on the vertical axis, we can say that the slope of the PPF (in absolute value) equals the opportunity cost of producing Good X. This is true because the slope:

describes the trade-off resulting from the production of Good X in terms of Good Y

Individuals and countries specialize because of ______ in opportunity costs.

differences

Individuals and countries specialize because of ________ in opportunity costs

differences

When resources are allocated in such a way that it is possible to increase the production of one good only by decreasing the production of another; then the allocation of resources is:

efficient

The circular flow model shows how __________ and _________ interact in two key markets: the resource market and the product market.

households; firms

The earliest two fundamental steps in learning the economic way of thinking are understanding

how resources and scarcity affect the costs and benefits of choices how people make choices

The law of _____ ______ cost says that because some resources are better suited to producing one good or service than another, as the production of a good or a service increases, the ______ cost of each additional unit rises.

increasing opportunity; opportunity

When resources are allocated in such a way that it is possible to increase the production of one good without decreasing the production of another, then the allocation of resources is:

inefficient

The value of the next best forgone alternative is the _________ cost.

opportunity

Consider a production possibilities frontier (PPF) with Good X on the horizontal axis and Good Y on the vertical axis. The slope of the PPF tells us the _______ of producing one additional unit of Good X. The slope of the production possibilities frontier equals the:

opportunity cost

A graph that shows the possible combinations of two different goods or services that can be produced with fixed resources and technology is the:

production possibilities frontier

The production possibilities frontier, or curve, is a graphical representation of the

production possibilities schedule

Scarcity means that ______ are limited, as compared to unlimited wants of individuals.

resources

The term _______ describes the fact that unlimited wants cannot be completely satisfied with limited resources.

scarcity

The opportunity cost of producing a good or a service can be found by:

solving the cost of one good in terms of another

Opportunity cost is:

the value of the opportunity that you give up when you choose one activity instead of another.

________ is the study of how individuals and societies allocate scarce resources among many competing uses, and how this decision-making affects the economy at large.

Economics

______ ability is the talent or ability to combine land, labor, and capital to produce goods and services.

Entrepreneurial

______ capital refers to the knowledge and skills that people acquire to increase productivity

Human

________ __________ is most plainly visible when spending more money on one thing means that less money can be spent on another thing.

Opportunity cost

________ capital refers to the tangible items that are created to increase productivity, such as, tools, factories, machinery, etc.

Physical

The process of assigning a good, a service, or a resource to one use instead of another describes "________."

allocation

In the circular flow model, _________ must buy resources in order to produce the output they will sell to households.

businesses

A model that concisely describes how goods, services, resources, and money flow back and forth in an economy is the:

circular flow model

The quality of an _______ model can be measured by how well it reflects reality and whether it gives us insights that can be used in the real world.

economic

Which of the following are other names for resources? Choose all that apply.

factors of production; inputs

In the circular flow model, the two markets are the ________ market and the ________ market.

resource; product

Although points on the production possibilities frontier represent different combinations of output, ultimately what they show is how we allocate our______ to the production of two different goods or services.

resources

Because the world is characterized by scarcity, people must allocate the limited ______ at their disposal among many competing uses.

resources

Because resources are ______, they must be allocated between competing uses.

scarce