Unit 1: Chapter 2: Economic Models

Question 1

What tools do we use in Economics to better understand and teach economic princples?

Answer 1

Models

Question 2

Define the Term: Tabular Model

Answer 2

Listing different variables next to each other in a table

Question 3

Define the Term: Line Graph

Answer 3

Graphing multiple data points along an X-Y Axis

Question 4

Define the Term: Production Possibilities Curve

Answer 4

A line graph that allows to see maximum production possibilities and identify maximum utilization of resources

Question 5

Be able to draw a circular flow model

Answer 5

See page 35 in the book

Question 6

What does a business give to households in a circular flow model?

Answer 6

Domestic Product (goods) and Factors of Payment (rent, wages, interest, profit)

Question 7

What is the term for all goods/services produced within a country/state?

Answer 7

Gross Domestic Product or GDP

Question 8

What does a household give to businesses?

Answer 8

Consumption Expenditures, Factors of production (land, labor, financial, capital, entrepeneurship)

Question 9

Define the Term: Factors of Production

Answer 9

The Land, labor, financial capital, and entrepreneurship that households provide to businesses

Question 10

Define the Term: Factors of Payment

Answer 10

The Rent, Wages, Interest, Profit that businesses enjoy which goes to individuals within the business

Question 11

What does Government provide businesses within a circular flow graph?

Answer 11

Purchases of their goods.