BJU Economics Ch 2

What is an example of dissaving?

all payments for the use of an owner's property

Economic models are always accurate.

What might happen without financial markets?

On a PPC graph, any point outside the line represents...

all the necessary resources for production of goods

Economic models help instruct students by concretely illustrating economic theories.

the total that households spend on the goods and services produced by businesses

"Crowding out" occurs when...

Which of the following would an economist not consider an example of capital?

the goods used to produce other goods

circulates money in the ACFM

when government collects more in taxes than it spends

payments business firms make in exchange for factors of production

payments business firms make on borrowed money

all institutions that receive deposits from households and lend to business firms

The two basic elements for the circular flow model are households and governments.

A PPC graph enables economists to see the minimum feasible amounts of two commodities a business can produce.

Which of the following would an economist not consider an example of factor costs?

The circular flow model attempts to visually explain...

PPC stands for...

On a PPC graph, any point on the line represents...

Which of the following would an economist not consider an example of land?

the difference between revenues received from the sale of goods and the costs that went into its production

Financial markets take savings of households and channels them into businesses to facilitate effective operation.

Which of the following would be considered a transfer payment?

Economic models provide useful, though imperfect, mechanisms for predicting economic outcomes.

von Mises was know for exploring government intervention in economic models.

On a PPC graph, any point inside the line represents...

Be able to deconstruct a given scenario by using the four factors of production.

when governmental spending exceeds the amount received in taxes

Be able to create both a tabular model and line graph of a given scenario.

the activity of creatively combining natural resources, human labor, and capital to develop new and useful goods

All the goods and services businesses produced and sold

The discouragment of entrepreneurship decreases the flow of new products.

Capital is the most important factor of production.

all payments for the labor used to produce goods or services

What is the disadvantage of the schedule (tabular model) as compared to the line graph?

all the human effort that goes into the creation of goods

all the natural resources that go into the production of goods

Where do the factors of production originate?