The Simple Circular-Flow Model for Households and Firms Is an Economic

question 140

Multiple Choice

The simple circular-flow model for households and firms is an economic model that focuses on the interaction between households and firms.Which of the following statements regarding the model is correct?

• A)The model is missing the interaction between firms and the resource market.Therefore,it cannot predict well.
• B)The model is missing the interaction between households and the product market.Therefore,it cannot predict well.
• C)The model has too many simplifying assumptions,and it cannot be used to make predictions about the real world.
• D)The model is a simplification of the real world,and it can be used to make predictions about the real world.
• E)The model is missing the interaction between firms and the product market.Therefore,it cannot predict well.

Understand the principles of behaviorism and its focus on observable behavior.

Recognize the contributions and limitations of Freudian psychology and its impact on the field.

Acknowledge the evolution of contemporary psychology and its approach to the mind-body issue.

Appreciate the importance of research methodology and scientific inquiry within psychology.

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Definitions:

Absolute Advantage

The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than any competitor.

Comparative Advantage

A principle that states a country or individual can produce a particular good or service at a lower opportunity cost than others.

Trade Patterns

The trends and tendencies in international trade, including what goods and services are traded, with whom, and in what direction.

Gain From Trade

The gain from trade refers to the increase in consumer and producer surplus that results from an open market, allowing countries or individuals to specialize in production and exchange.