Households receive their income in the circular flow diagram by
A. selling the goods they produce at home.
B. selling resources they own to business firms.
C. obtaining dividends and interest payments.
D. selling the use of their property.
Answer: B
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Which of the following best defines capital as a factor of production?
A) the gifts of nature that businesses use to produce goods and services B) the knowledge and skills that people obtain from education and use in production of goods and services C) financial assets used by businesses D) instruments, machines, and buildings used in production
Typically, division of labor and specialization result in
a. increases in labor productivity b. decreases in the marginal physical product of labor c. decreases in the marginal revenue product of labor d. decreases in the total output produced by labor e. decreases in efficiency because workers are laid off
Based on this producer surplus graph, which unit gives the firm the greatest producer surplus?
a. the first
b. the second
c. the third
d. the fourth
Answer the following statements true (T) or false (F)
1. The quantity or supply of land resources available to a nation is pretty much fixed and cannot increase over time. 2. Entrepreneurship refers to a new college graduate who is looking for a job with a large company. 3. If economic resources were perfectly adaptable to alternative uses, then there would be constant opportunity costs along the production possibilities curve. 4. If the marginal benefits are greater than the marginal cost of an activity, then society should allocate fewer resources to this activity.