In Terms of the Circular Flow Diagram, Households Make Expenditures

question 160

Multiple Choice

In terms of the circular flow diagram, households make expenditures in the _____ market and receive income through the _____ market.

• A)product; financial
• B)resource; product
• C)product; resource
• D)capital; product

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Definitions:

Fixed Proportion

A production scenario where inputs must be used in specific, unchangeable ratios to produce output, often resulting in a limitation on the flexibility of the production process.

Isoquant Map

A graphical representation showing different combinations of inputs that produce the same level of output.

Curves

In various contexts, it refers to graphical representations that show a relationship between two or more variables or factors.

L-shaped Isoquant

A graphical representation in production theory showing combinations of input factors that yield the same output, where the shape indicates perfect substitutability between inputs up to a point, followed by no substitutability.