ECON Homework #3

Which of the following pairs does not​ match? A. Labor;interest B. Entrepreneurship;profit C.Capital; Interest D. Land; Rent

A. Land;interest

Consumption goods and services are items that are bought by_______________________ and used in the ______________They include items such as ________________ .

Individual and governments; current period; chocolate chip cookies

The fall in exports is​ ______. The decrease in U.S. consumer spending is a​ ______.

a decrease in the expenditure flow from the rest of the world economy to the U.S. economy through the goods​ market; decrease in the money flow from households to firms through the goods market

n the circular flow figure of the global​ economy, the flows of the components manufactured in other countries appear as​ _______, and the flows of Dreamliner sales to foreign airlines appear as​ _______.

expenditure on U.S.​ imports; expenditure on U.S. exports

The functional distribution of income shows the distribution of income among​ ______ and the personal distribution of income shows the distribution of income among​ ______.

factors of​ production; households

In the United States in​ 2011, the factor of production that earned the largest share of income was​ ______ and it earned​ ______ percent of total income.

labor; 69

Human capital is​ _______.

the knowledge and skill that people obtain from​ education, on-the-job​ training, and work experience

A circular flow model shows the interrelationship between the​ ____ markets and the​ ____ markets.

​goods; factor

Read Eye on the Dreamliner. Then answer the following questions. 1.​ _______ firms are involved in the production of the Dreamliner. ​_______ of the firms are identified in the figure in the popup. 2. The Dreamliner is a​ _______ good because it is​ _______. 3. The factors of production used to make the Dreamliner are​ _______. 4. An example of​ _______ that is used to produce the Dreamliner is​ _______.

1. More than​ 400; Fifteen 2. ​capital; bought by airlines to increase productive resources 3. Land and labor, capital and entrepreneurship 4. ​labor; the work of the assembly workers ​capital; the building that houses​ Boeing's assembly line ​entrepreneurship; the creative and imaginative input of​ Boeing's top managers who organize the resources used to produce the Dreamliner

What are the choices made by households and firms that determine what​, how​, and for whom goods and services are​ produced? ​Where, in the circular flow​ model, do those choices​ appear? 1. Households choose _______________ and firms choose __________________. 2. These choices create a flow of ____________________ from households to firms and a flow of _____________ from firms to households through___________ markets. Firms choose how to produce. 3. These choices create a flow of _____________ from households to firms and ____________ from firms to households through_________ markets. .

1. What to consume; what to produce 2.expenditure on goods and services; goods and services; goods 3. Factors of Production; factor incomes; factor

1. The two types of goods and services produced are​ _______. 2. An example of a consumption good is​ _______. An example of a consumption service is​ _______. An example of a capital good is​ _______.

1. consumption goods and services and capital goods 2. an​ iPad; having a cavity filled by your​ dentist; the pizza oven at the local pizzeria

What are the real flows and money flows that run between​ households, firms, and governments in the circular flow​ model? 1. The real flows are​ ______ that flow from households to firms through​ ______ markets and​ ______ that flow from firms to households and governments through​ ______ markets. 2. The money flows are​ ______.

1. the services of factors of​ production; factor; the goods and​ services; goods 2. factor​ incomes, household and government expenditures on goods and​ services, taxes, and transfers

1. The four factors of production are​ ______. 2.Land earns​ ______, labor earns​ ______, capital earns​ ______, and entrepreneurship earns​ ______.

1. ​land; labor;​ capital; entrepreneurship 2. ​rent; wages;​ interest; a profit​ (or incurs a​ loss)

1.Capital consists of​ _______. 2.Examples of capital include all of the following except​ _______.

1. ​tools, instruments,​ machines, buildings, and other items that have been produced in the past and that businesses now use to produce goods and services 2.Google stock

Classify each item in the list as an example of one of the flows in the circular flow model. 1.You buy your groceries.________________________ 2.Chrysler buys robots.______________________________ 3.Southwest rents some aircraft.______________________ 4.Nike pays Roger Federer for promoting its sport shoes. _______________________ 5.General Motors pays its workers wages.________________________ 6.IBM pays a dividend to its stockholders. ____________________________

1.Expenditure on goods and services 2.Land, labor, capital, and entrepreneurship 3.Land, labor, capital, and entrepreneurship 4.Rent, wages, interest, and profit 5.Rent, wages, interest, and profit 6.Rent, wages, interest, and profit

Indicate all the items in the following list that are not factors of production and explain why. Item a​: Trucks used by FedEx to make deliveries Item b​: Your dog Item c​: Undiscovered coal reserves Item d​: A garbage truck Item e​: A pack of bubble gum Item f​: The President of the United States

Items ​b, c, and e because they are not productive resources used to produce goods and services—​land, ​labor, capital, or entrepreneurship.

Capital goods are goods that are bought by ___________________ to ________________________ They include items such as________________________. .

business and governments; increase their productive resources; shopping malls

Compare the scale of agricultural production in the advanced and developing economies. Agricultural production as a percentage of total production is higher in__________ economies. The total amount of food produced is greater in _________________ economies.

developing;developing

Describe what​, how​, and for whom goods and services are produced in developing economies. Food is a _____________ percentage of total production in developing countries. ___________________ is an increasing percentage of total production in developing countries. Most production in developing economies ___________________ modern​ capital-intensive technologies. People with skills enjoy ____________ incomes while those who are unskilled have ____________ incomes.

large;manufacturing; does not use; rising; falling

The Dreamliner influences ___________ goods and services are produced by creating a demand for components manufactured around the world. The Dreamliner influences _____________ goods and services are produced by developing new technologies for the design and construction of an airplane. The Dreamliner influences ____________ goods and services are produced by creating​ rent, wages,​ interest, and profit for the factors of production engaged in making

what; how; for whom

*Rent* is the income paid for the use of​ _____. *Wages* are income paid for the services of​ _____. *Profit* ​(or loss) is the​ _____ earned by an entrepreneur for running a business. *Interest* is the income paid for the use of​ _____.

​land; ​labor; ​income; capital

*Households* are individuals or groups of people​ _____ together. *Firms* are institutions that organize​ _____ of goods and services.

​living; the production

Compared to the developing​ economies, the advanced economies have​ ____ human capital and​ ____ physical capital.

​more; more