Figure 2-15 -Refer to Figure 2-15. in the Circular Flow Diagram, Economic

question 380

Multiple Choice

Figure 2-15
-Refer to Figure 2-15. In the circular flow diagram, economic agents M represent

• A) households.
• B) product markets.
• C) firms.
• D) factor markets.

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Definitions:

Protection-As-A-Bargaining-Chip

A strategic use of trade barriers or policies by a country to gain concessions or favorable terms from other countries.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay.

Producer Surplus

The difference between the amount producers are willing and able to sell a good for and the actual amount received by them when the good is sold at the market price.

Comparative Advantage

The capacity of a person or collective to conduct a specific economic operation more effectively compared to another.