Chapter 2 : Thinking like an economist

What do you call a diagram of the economy that shows the flow of goods and services, factors of production, and monetary payments between households and firms

• Normative Statements

• Positive Statements

• Production Possibilities Frontier

• Circular Flow

Inputs such as land, labor, and capital are collective called:

• Factors of production

• Efficiency components

• Macroeconomic factors

• Microeconomic factors

A graph that shows the combination of output the economy can possibly produce given the available factors of production and the available production technology

• Production Possibilities Frontier

• Productivity curve

• Gross Domestic Product

• Circular Flow Diagram

____ is referred to as getting maximum output from the resources available.

• Profit maximization

• Efficiency

• Cost minimization

• Income effect

Which of the following is NOT a factor of production

• land

• labor

• capital

• money

• All of the above are factors of production

Points on the Production Possibilities Frontier are 

• efficient

• inefficient

• unattainable

• normative

• none of the above

What kind of statement is this: The statement, "An increase in inflation tends to cause unemployment to fall in the short run".

• Positive Statement

• Negative Statement

• Normative Statement

• Neutral Statement

What kind of statement is this: "JILCF should lower down its tuition fee so that more students within its nearby areas can afford to go to college".

• Positive Statement

• Negative Statement

• Normative Statement

• Neutral Statement

What kind of statement is this: "Most healthcare should be provided free

at the point of use".

• Positive Statement

• Negative Statement

• Normative Statement

• Neutral Statement

What is the term used to describe the total market value of all final goods and services produced in a country in a given period of time?

• Gross National Product

• Gross Domestic Product

• Net National Product

• Net Domestic Product