Chapter 2 Home Work Questions
Write the letter of the Correct Answer
A production possibilities frontier that illustrates
the production of cars and computers shows the
opportunity cost of computers measured in
terms of cars.
A. True
B. False
A circular flow diagram shows how
dollars flow through financial markets
among households and firms.
A. True
B. False
Positive statements are prescriptive
and cannot be confirmed or refuted by
examining the evidence.
A. True
B. False
In a circular flow diagram, decisions
are made by
A. Households and firms. Firms are
sellers in the markets for goods and
services; households are buyers in
the markets for goods and services.
B. Individuals and government.
Individuals are sellers in the markets
for goods and services; the
government is a buyer in the
