2.5 KEY TERMS

image | interactive activity

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.

Question

Model
Other things equal assumption
Production possibility frontier
Factors of production
Technology
Comparative advantage
Absolute advantage
Barter
Circular-flow diagram
Household
Firm
Markets for goods and services
Factor markets
Income distribution
Positive economics
Normative economics
Forecast
a diagram that represents the transactions in an economy by flows around a circle.
the technical means for the production of goods and services.
a person or a group of people who share income.
an organization that produces goods and services for sale.
a transaction in which people directly exchange goods or services that they have for goods or services that they want.
a simple prediction of the future.
a simplified representation of a real situation that is used to better understand real-life situations.
the branch of economic analysis that makes prescriptions about the way the economy should work.
markets in which firms buy the resources they need to produce goods and services.
markets in which firms sell goods and services that they produce to households.
the way in which total income is divided among the owners of the various factors of production.
the assumption that all other relevant factors remain unchanged.
the resources used to produce goods and services.
the advantage an individual or country has 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 others.
the advantage an individual or country has in an activity if that individual or country can do it better than others.
the branch of economic analysis that describes the way the economy actually works.
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.