Chapter 2 - Economics

What is the advantage of the line graph over the schedule?

• It better illustrates results
• It contains more data
• It is less complicated
• It is more scientific

What do the points of a graphed line on a PPC graph represent?

• Production variables
• Minimum costs
• Wasted resources
• Production efficiency

What are the two basic elements of the circular flow model?

• Households and business firms
• Firms and stock markets
• Stock markets and banks
• Banks and households

From whom do businesses ultimately receive the factors of production?

• Banks
• Government
• Households
• Stockholders

Which of the following can NOT be considered an example of land?

• Wheat
• Petroleum
• Sheep
• Machinery

Which model is designed to illustrate the economy of an entire nation?

• Circular flow model
• Line graph
• Tabular graph
• PPC

Which of the following can NOT be considered an example of capital?

• Business loan
• House
• Tractor
• Power tool

Which of the following is a transfer payment?

• Department of Defense purchases
• Wages of postal workers
• Income tax withholdings
• Unemployment benefits

Which concept did Ludwig von Mises promote?

• Planned economies
• Government intervention
• Free markets
• Socialism

Which part of the circular flow model receives savings and repayments?

• Households
• Business firms
• Government
• Financial markets