3. The circular flow model depends upon which economic principles?
a. Property rights are specified clearly.
b. Markets are impersonal.
c. Firms and households interact only in markets
d.All of the above

4. The pre-analytical vision of the circular flow model holds that the economy:
a. is self contained and self regulating
b. is a subsystem of a broader social system
c. is a subsystem of a larger biophysical system
d. the economy is best analyzed by focusing on productione. all of the above

5. The simple circular flow model (without leaks or injections) shows that an economy reaches equilibrium when:
a. households save as much as they can
b. the value of goods and services equals the sum of factor payments
c. more capital goods are produced than consumer goods
d. inflation is low

6. Which type of model best describes the circular flow diagram?
a. a conceptual model
b. a mathematical model
c. a physical model
d. a computer model

7. The Microeconomics in Context model:
a. places the human economy within a finite and non-growing biophysical system
b. contends that human labor is the source of all value
c. holds the position that there are no limits to the growth of the macroeconomy
d. ignores the role of energy in the economy

8. Biophysical limits to economic activity might include:
a. supplies of fossil fuels and mineral resources
b. enough land to grow food
c. the atmosphere’s ability to absorb waste
d. all of the above

9. In the microeconomics in context model, the sectors of economic activity include:
a. households, families and communities
b. the public purpose sector
c. the business sector
d. all of the above

10. The dependent variable in the function y = f(x)is also known as
a. the cause
b. the effect
c. an instrumental variable
d. noneof the above

11. A model is:
a. a formalization of our assumptions about a system
b. a simplified representation of reality
c. one method of reasoning from cause to effect
d. all of the above

12. Systems are characterized by:
a. boundaries
b. feedbacks
c. inputs and outputs
d. all of the above

13. The use of models allows economists to:
a. simplify
b. expand or reduce a problem to human scale
c. separate cause from effect
d. make predictionse. all of the above

14. The ultimate force behind economic production according to the microeconomics in context model is:
a. entrepreneurial ability
b. low taxes
c. electromagnetic energy from the sun
d. market self-regulation

15. Sources of inputs into the microeconomics in context model include:
a. products of photosynthesis
b. minerals synthesized in exploding stars
c. fossil fuels
d. all of the above

16. Theory:
a. is simply a bunch of unsubstantiated assumptions
b. is the same as scientific law
c. has no place in science
d. explains the mechanism behind observation

17. The word associated with the ratio of the change in the effect/change in the cause is:
a. demand
b. cost
c. margin
d. theory

3. The circular flow model depends upon which economic principles?...