Chapter 2

Question 1

What do firms/businesses do?

Answer 1

Produce goods and services using factors of production( labor, land, and capital)

Question 2

HouseHolds

Answer 2

Owns factors of products and consumes goods and services

Question 3

Who buys and sells in markets for goods and services

Answer 3

Househould buys and firms sells to households

Question 4

Who buys and sells in market for factors and products

Answer 4

Firms buys factors of productions and households sell their factor of production

Question 5

Microeconimcs

Answer 5

Study of house households and firms interact with each other

Question 6

Macroeconimcs

Answer 6

Study of overall economics in a society

Question 7

Normative Analysis

Answer 7

Makes a claim how the world ought to be. Relies on personal values
Example: We ought to end homelessness

Question 8

Positive Analysis

Answer 8

Describes the world as is and relies on data.
Example: Minimum wage laws causes uneployment