Chapter II "Thinking Like An Economist" Flashcards
1
Q
The economy is simplified to only show a limited type of decision makers
A
Circular-flow diagram
2
Q
Land, labor, Capitol; help firms produce goods
A
Factors of Production
3
Q
Households are buyers and firms are sellers
A
Markets for goods and services
4
Q
Households are sellers and firms are buyers
A
Market for factors of production
5
Q
Represents the potential, various amounts of production capacity between multiple industries. Often have “bowed shape.”
A
Production Possibilities Frontier
6
Q
Study of how Households and Firms make decisions and interact in markets.
A
Microeconomics
7
Q
Study of economy-wide phenomena
A
Macroeconomics
