Figure 2: Circular flow diagram   Refer to figure 2.  Olivia owns farmland, which she rents to a large agricultural company. Lucas buys fresh produce from that company at a grocery store. If the rental income Olivia receives is represented by a flow of dollars from Box A to Box C, then Lucas’s grocery purchase is represented by a flow of dollars from:

In the circular-flow diagram, which of the following transactions takes place in the markets for goods and services?

Which of the following statements best represents the idea that “economics studies how society manages its scarce resources”?

A hypothetical country of KapociusLand produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is year 2.Table 4Refer to table 4. What was this KapociusLand’s GDP deflator in year 3?

Suppose Best Buy, a US-owned company, purchases $750,000 worth of smartphones from Taiwan this year, selling $500,000 of them to U.S. consumers. How do these transactions affect U.S. GDP this year?

Chiara has a part-time job that pays $15 per hour. Instead of working for four hours, she decides to study for an upcoming exam. What is Chiara’s opportunity cost of studying?

Figure 5: Demand for turkey in the United States  Refer to figure 5.  All else equal, a large number of people becoming vegetarians would cause a move from

Figure 1: Inflation rate in Peru and U.S. (1980 – 2009)   Refer to figure 1. What can be implied from the evolution of the inflation rates in Peru and the U.S. in the sample period shown? (Hint: Remember the principles of economics. What generates inflation?)

Lexi buys and sells real estate. Two weeks ago, she paid $400,000 for a house on Pine Street, intending to spend $75,000 on repairs and then sell the house for $550,000. Last week, the city government announced a plan to build a new landfill on Pine Street just down the street from the house Lexi purchased. As a result of the city’s announced plan, she is weighing two alternatives: go ahead with the $75,000 in repairs and then sell the house for $380,000, or forgo the repairs and sell the house as it is for $300,000. Lexi should

Just like models constructed in other areas of science, economic models