models - circular flow, PPF

Question 1

Production possibilities frontier (PPF)

Answer 1

production possibility curve, or production possibility boundary is a graphical representation showing all the possible options of output for two products

Question 2

Point on curve

Answer 2

possible and efficient

Question 3

point inside curve

Answer 3

possible and inefficient

Question 4

point outside curve

Answer 4

impossible and efficient

Question 5

feasible

Answer 5

point inside or on curve

Question 6

market for goods and services

Answer 6

households
-spend/consumption towards the market
-goods and services leave the market to the household

Firms
-goods and services sent towards the market
-revenue leaves the market to the firm

Question 7

government

Answer 7

sends goods and services towards firms and households
receives net taxes from firms and households

Question 8

market for factors of productions

Answer 8

households
-sells labor, land, and capital and sent towards the market
-income from selling is sent towards household (leaving the market)

firms
-firms buy land, labor, and capital which leaves the market
-firms send profit (wages, rent) to the market