Principles of Microeconomics Chapter 2&3 Thinking Like an Economist; Interdependence & Gains from Trade

________ loop represents flows of inputs & outputs.

________ allows the total production in economy to rise (increase efficiency)

________ can make INDIVIDUALS worse off, but COUNTRY as a whole better off.

________ are difficult because of TRADEOFFS.

________ is greater when frontier is steeper.

Outer ________ represents corresponding flow of $ $.

________ represent extreme possibilities.

________ affect normative views about what policies are desirable.

What are simplified to improve understanding? Answer with a single words or term.

What is profit for firm owners, who are themselves members of households? Answer with a single words or term.

________: prescriptive; claim about how the world ought to be; evaluated using values /ethics AND facts.

________: descriptive; claim about how the world is; can be evaluated using evidence.

Why ________ is not always followed.