Extra

Question 1

What is the role of firms in the two types of markets in circular flow model

Answer 1

1. Firms produce and sell goods and services in the markets for goods and services
2. They hire and use factors of production in the markets for factors of production

Question 2

Why would a production possibility frontier have a negative slope so down into the right

Answer 2

If an economy is operating efficiently, production choices have opportunity cost. If you want more than one thing, we must sell less of another

Question 3

Provide two reasons why economist disagree

Answer 3

1. different scientific judgments

2. Different values

Question 4

Name to economic propositions on which more than 90% of economists agree

Answer 4

1. A ceiling on rent reduces the quantity and quality of housing available
2. Import quotas usually reduced general economic welfare

Question 5

What is the rule of households in the two types of markets in the circular flow model

Answer 5

Households by and consumer goods and services in the markets for goods and services

They own and Sell factors of production in the markets for factors of production