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In the circular flow diagram..
the factors of production are labor, land, and capital
In economics, capital refers to..
buildings and machines used in the production process
In the circular flow diagram, income payments flow from ____ to ____, and sales revenue flows from ____ to ____.
- firms to households
- households to firms
An economic outcome is said to be efficient if the ecomony is..
getting all it can get from the scarce resources it has available
The opportunity cost of obtaining more of one good is shown on the production possibilities frontier as the..
amount of the other good that must be given up
When a production possibilities frontier is bowed outward, the opportunity cost of producing an additional unit of a good..
increases as more of the good is produces
If a production possibilities frontier is bowed outward, then the opportunity cost of producing more of the first good is highest when..
the economy is producing much of the first good and little of the second good
Production possibilities frontiers are usually bowed outward. This is because..
resources are specialized; that is, some are better at producing particular goods rather than other goods
A production possibilities frontier can shift outward if..
there is a technological improvement
Microeconomics is the study of..
how individual households and firms make decisions
Macroeconomics is the study of..
Normative statements are..
prescriptive, whereas positive statements are descriptive
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