Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 2, Problem 2CQQ
To determine
The role of households and firms in the market for factors of production in circular flow.
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The circular-flow diagram illustrates that, in marketsfor the factors of production,a. households are sellers, and firms are buyers.b. households are buyers, and firms are sellers.c. households and firms are both buyers.d. households and firms are both sellers.
4. An economy consists of three workers: Larry, Moe,and Curly. Each works 10 hours a day and can produce two services: mowing lawns and washing cars.In an hour, Larry can either mow one lawn or washone car; Moe can either mow one lawn or wash twocars; and Curly can either mow two lawns or washone car.a. Calculate how much of each service is producedunder the following circumstances, which welabel A, B, C, and D:r All three spend all their time mowing lawns. (A)r All three spend all their time washing cars. (B)r All three spend half their time on eachactivity. (C)r Larry spends half his time on each activity, whileMoe only washes cars and Curly only mowslawns. (D)b. Graph the production possibilities frontier for thiseconomy. Using your answers to part a, identifypoints A, B, C, and D on your graph.c. Explain why the production possibilities frontierhas the shape it does.d. Are any of the allocations calculated inpart a inefficient? Explain.
Explain, how does the economy as a whole works? And which economic agents are of the greatest importance in determining what goods and services are produced?
Chapter 2 Solutions
Essentials of Economics (MindTap Course List)
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Similar questions
In the simple circular-flow diagram, who buys the factors of production?
A) Households only
B) Firms only
C) Both households and firms
D) Neither households nor firms
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The circular-flow diagram illustrates that, in markets for the factors of production?
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What is the circular flow diagram, and what does it demonstrate?
What are the two main categories of participants in markets? Which determines in a free market what goods and services are produced?
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Which of the following best describe what we mean byresources in economics?
A.
The natural resources, like water and trees.
B.
The factors of production used to produce goods and services.
C.
The human resources, like workers.
D.
The capital resources, like tools and buildings.
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Name a way that your family interacts in the marketsfor the factors of production and a way that itinteracts in the markets for goods and services
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Discuss a way that your family interacts in the factor market and a way that it interacts in the product market.
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I. Essay. Explain the following.1. What is Applied Economics?2. What are the three basic economic concepts and briefly explain each. 3. What are the two assumptions of economics? 4. What are the basic economic problems? 5. What are the factors of production?
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1. Scarcity means that resources are:
a. Unlimited
b. Under severe restrictions
c. Fewer people want them
d. Less able to be fulfills
2. Yoko can buy a chocolate bar, a can of drink and a packet of crisps. She buys the chocolate bar as she wants it more than the drink and the crisps. The opportunity cost of buying the chocolate bar is
a. Can of drink
b. Can of drink and packet of crisps
c. Packet of crisps
d. Chocolate bar
3. For future development of the economy, sustainable growth is important
a. True
b. False
4. Scarcity is in relation to people’s
a. Wants and demands
b. Wants
c. Money
d. Demands
5. Economics assumes that people, businesses and governments make good decisions
a. True
b. False
6. Goods and services have a price because
a. Resources are scarce in relation to people’s demands
b. Resources are scarce in relation to people’s wants
c. Nothing is free
d. Customers demand products
7. The basic Economic problem is
a. Reduce the rate of inflation
b. Control…
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describe.2.countries or societies with 2 different types of economics and compare how the type of economy affects the answers to the question of what,how and for whom to produce in each country
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