Test Questions-1

Test Questions-1 - Test Questions 2) In a circular flow...

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Test Questions 2) In a circular flow diagram, income payments flow from firms to households and sales revenue flows from households to firms 3) Households to Markets for factors of production represents the flow of land, labor and capital 7) If the households are the buyers in the markets then box C represents that firms are the sellers in the markets. 10) Production possibilities frontiers are usually bowed outward. This is because resources are different and can be ranked from most productive to least productive 12) Inefficient production is represented by any point that is inside the production possibility frontier 23) Fred specializes in the good in which he has a comparative advantage, and Ginger specializes in the good in which she has a comparative advantage. The total production of ballet slippers would be 8 and total production of tap shoes would be 8. 24) Originally, Fred was spending half of his time producing tap shoes and the other half of his time producing ballet slippers, while Ginger was dividing her time the same way. Then Fred began spending all of his time producing the good in which he
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This note was uploaded on 04/27/2008 for the course ECON 205 taught by Professor Hampton during the Spring '08 term at St. Cloud.

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Test Questions-1 - Test Questions 2) In a circular flow...

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