Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.
Firm Other things equal assumption Barter Factor markets Model Technology Positive economics Comparative advantage Circular-flow diagram Production possibility frontier Markets for goods and services Income distribution Household Forecast Absolute advantage Factors of production Normative economics | an organization that produces goods and services for sale. the branch of economic analysis that describes the way the economy actually works. the advantage conferred on an individual or country in an activity if the individual or country can do it better than others. A country with an absolute advantage can produce more output per worker than other countries. the branch of economic analysis that makes prescriptions about the way the economy should work. the advantage conferred on an individual or country in producing a good or service if the opportunity cost of producing the good or service is lower for that individual or country than for other producers. a person or a group of people that share their income. the direct exchange of goods or services for other goods or services without the use of money. in the development of a model, the assumption that all relevant factors except the one under study remain unchanged. a simple prediction of the future. a simplified representation of a real situation that is used to better understand real-life situations. the resources used to produce goods and services. Labour and capital are examples of factors. the way in which total income is divided among the owners of the various factors of production. markets in which firms sell goods and services that they produce to households. a diagram that represents the transactions in an economy by two kinds of flows around a circle: flows of physical things such as goods or labour in one direction and flows of money to pay for these physical things in the opposite direction. the technical means for producing goods and services. markets in which firms buy or rent the resources they need to produce goods and services. a model that illustrates the trade-offs facing an economy that produces only two goods. It shows the maximum quantity of one good that can be produced for any given quantity produced of the other. |