ECON 202 Barnes Ch 2 Aplia HW

An economic model is

a mechanical machine that replicates the functioning of the economy.
a fully detailed, realistic description of the economy.
a simplified representation of some aspect of the economy.
a computer program that predicts the future of the economy. a simplified representation of some aspect of the economy. The circular-flow diagram illustrates that, in markets for the factors of production,

households are sellers, and firms are buyers.
households are buyers, and firms are sellers.
households and firms are both buyers.
households and firms are both sellers. households are sellers, and firms are buyers.

The circular-flow diagram simplifies the economy by including only two types of decision makers: firms and households. Firms produce goods and services using inputs, such as labor, land, and capital. These inputs are called the factors of production. Households own the factors of production and consume all the goods and services that the firms produce. Therefore, in the markets for the factors of production, households are sellers, and firms are buyers. A point inside the production possibilities frontier is

efficient, but not feasible.
feasible, but not efficient.
both efficient and feasible.
neither efficient nor feasible. feasible, but not efficient. An economy produces hot dogs and hamburgers. If a discovery of the remarkable health benefits of hot dogs were to change consumers’ preferences, it would

expand the production possibilities frontier.
contract the production possibilities frontier.
move the economy along the production possibilities frontier.
move the economy inside the production possibilities frontier. move the economy along the production possibilities fro…………………………….