Based on the circular flow diagram, how are households and firms similar?
a. Both receive a profit.
b. Both receive revenue from exports.
c. Both pay wages to employees.
d. Both pay taxes to the government.
d. Both pay taxes to the government.
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Studies indicate that after the Civil War and up to the 1890s, farmers did not benefit from an improvement in their terms of trade between agriculture and manufacturing
However, they did benefit from a decline in transportation charges relative to farm prices. Indicate whether the statement is true or false
If a country is currently producing inside its production possibilities curve
A) it can increase the production of both goods by putting unemployed resources to work. B) it can increase the production of one of the goods only if it reduces the production of the other good. C) it is experiencing efficient production of one good but not the other. D) None of the above are correct.
Once the supply curve for a product or service is drawn, it
a. remains stable over time. b. can shift either rightward or leftward. c. is possible to move along the curve, but the curve will not shift. d. tends to become steeper over time.
The production decisions of perfectly competitive firms follow one of the Ten Principles of Economics, which states that rational people
a. consider sunk costs. b. equate prices to the average costs of production. c. prefer to purchase products from smaller rather than larger firms. d. think at the margin.