Chapter 2 Terms Flashcards
A table or chart explaining the relationships between pairs of variables.; also called a schedule.
Tabular Model
A table or chart explaining the relationships between pairs of variables; also called a tabular model.
Schedule
A graph formed by the plotting of data involving two variables and the connecting of the resulting points to form a line of infinite information from the data.
Line Graph
A model that enables an economists to see the maximum feasible amounts of two commodities that a business can produce when those items are competing for that business’s limited resources.
Production Possibilities Curve (PPC)
A model depicting the flower of economic goods and services between households, business firms, the government, and financial markets.
Circular Flow Model
A total expenditures made by all households.
Consumption Expenditures
The resources used in producing the nation’s GDP: land, labor, financial capital, and entrepreneurship.
Factor of Production
The factor of production denoting all natural resources that go into the production of goods.
Land
The factor of production denoting all human effort that goes into the creation of goods and services.
Labor
The tools business firms use to produce goods and services.
Capital
The factor of production denoting the activity of creatively combining natural resources, human labor, and financial capital in unique ways to develop new and useful products and services.
Entrepreneurship
The payments business firms make in exchange for the four factors of production.
Factor costs
Payment for the use of an owner’s property.
Rent
Factor costs involving all payments for labor used to produce goods or services.
Wages
An additional charge that a creditor demands from a borrower to cover the expense of the loan and to provide a profit.
Interest
