The circular flow model primarily studies how decisions are made by what two groups?
a. consumers and suppliers
b. households and firms
c. government and households
d. government and firms
b. households and firms
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Protecting air quality by establishing identical low limits on noxious discharges for all firms is a questionable policy because
A) a little pollution from many sources adds up to excessive pollution. B) by allowing firms to pollute at all it sacrifices the community's interest to private profit. C) it does not allow high-cost air polluters to exceed the air pollution limits. D) it tolerates preventable air pollution. E) no one knows the possible side effects of the discharges.
An increase in labor productivity relates to
A) working harder over time. B) working longer over time. C) producing the same output with fewer labor hours. D) producing the same output with more labor hours.
The existence of an inflationary gap would tend to benefit most
a. bankers. b. retired persons. c. unemployed workers. d. stock owners.
The production possibilities curve illustrates the basic principle that:
A. the production of more of any one good will in time require smaller and smaller sacrifices of other goods. B. an economy will automatically obtain full employment of its resources. C. if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced. D. an economy's capacity to produce increases in proportion to its population size.