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Chapter 2 Thinking Like an Economist

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Question;81. In the markets for the factors of production in the circular-flow;diagram;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.;82. In the markets for factors of production in the circular-flow;diagram;a.;households;provide firms with labor, land, and capital.;b.;households;provide firms with savings for investment.;c.;firms;provide households with goods and services.;d.;firms;provide households with profit.;83. Which of the following transactions does not take place in;the markets for factors of production in the circular-flow diagram?;a.;a;landowner leases land to a farmer;b.;a farmer;hires a teenager to help with harvest;c.;a;construction company rents trucks for its business;d.;a woman;buys corn for dinner;84. Which of the following transactions does not take place in;the markets for the factors of production in the circular-flow diagram?;a.;Jason;provides plumbing services for a plumbing company and receives an hourly wage;from the company for his services.;b.;Jennifer;works as a marriage counselor and her clients pay her on a per-hour basis for;her services.;c.;Brody;owns several shopping malls and receives rent payments from the companies;that operate those malls.;d.;Bree;sells advertising for a newspaper and receives a commission from the;newspaper company for each advertisement that she sells.;85. In the circular-flow diagram;a.;firms;are buyers in the markets for goods and services.;b.;households;are sellers in the markets for the factors of production.;c.;firms;are sellers in the markets for factors of production and in the markets for;goods and services.;d.;dollars;that are spent on goods and services flow directly from firms to households.;86. 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.;87. The outer loop of the circular-flow diagram represents the flows of;dollars in the economy. Which of the following;does not appear on the outer loop?;a.;Wages;b.;Income;c.;Capital;d.;Rent;88. The inner loop of the circular-flow diagram represents the flows of;inputs and outputs. Which of the following;does not appear on the inner loop?;a.;Wages;b.;Land;c.;Capital;d.;Goods;and services sold;89. In the circular-flow diagram;a.;profit;flows from households to firms.;b.;labor;flows from households to firms.;c.;services;flow from households to firms.;d.;All of;the above are correct.;90. In the circular-flow diagram;a.;taxes;flow from households to firms, and transfer payments flow from firms to;households.;b.;income;payments flow from firms to households, and sales revenue flows from;households to firms.;c.;resources;flow from firms to households, and goods and services flow from households to;firms.;d.;inputs;and outputs flow in the same direction as the flow of dollars, from firms to;households.

 

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