In the simple circular-flow diagram, households
a. are the only decision makers.
b. own the factors of production.
c. are buyers of inputs.
d. consume only some of the goods and services that firms produce.
The two loops in the circular-flow diagram represent
a. the flow of goods and the flow of services.
b. the flow of dollars and the flow of financial assets.
c. the flow of inputs into production processes and the flow of outputs from production processes.
d. the flows of inputs and outputs and the flow of dollars.
The production possibilities frontier is a graph that shows the various combinations of output that an
a. should produce.
b. wants to produce.
c. can produce.
When computing the opportunity cost of attending a concert you should include
a. the price you pay for the ticket and the value of your time.
b. the price you pay for the ticket, but not the value of your time.
c. the value of your time, but not the price you pay for the ticket.
d. neither the price of the ticket nor the value of your time.
A rational decision maker takes an action if and only if
a. the marginal cost of the action is zero.
b. the opportunity cost of the action is zero.
c. the total benefit of the action exceeds the total cost of the action.
d. the marginal benefit of the action exceeds the marginal cost of the action.
In the table below opening weekend box office receipts for four movies are listed with the CPI for the
year in which the movie was released.
The box office receipts are reported as dollars in the year of release.
brought in 13,211,513
during its opening weekend.
The opening weekend box office receipts for
in 2009 dollars equals:
Based upon this data, the movie with the highest inflation adjusted opening weekend receipts was:
One bag of flour is sold for $1.00 to a bakery, which uses the flour to bake bread that is sold for $3.00 to
A second bag of flour is sold to a consumer in a grocery store for $2.00.
Taking these three
transactions into account, GDP increases by: