Term
| The goal of an economist who formulates new theories is to |
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Definition
| contribute to an understanding of how the world works. |
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Term
| Economists make assumptions in order to |
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Definition
| focus their thinking on the essence of the problem at hand. |
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Term
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Definition
| can be useful, even if they are not particularly realistic. |
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Term
| The circular-flow diagram is a |
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Definition
| visual model of the economy. |
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Term
| Factors of production are |
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Definition
| used to produce goods and services. |
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Term
| When constructing a production possibilities frontier, which of the following assumptions is not made? |
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Definition
The quantities of the factors of production that are available are increasing over the relevant
time period. |
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Term
| If an economy is producing efficiently, then |
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Definition
| there is no way to produce more of one good without producing less of another good. |
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Term
| When two variables move in the same direction, the curve relating them is |
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Definition
| upward sloping, and we say the variables are positively related. |
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