Asked by Jailah Armstrong on Jun 30, 2024
Verified
In the circular-flow diagram,the product market is where:
A) firms buy goods and services.
B) firms buy resources used to produce goods and services.
C) households buy goods and services.
D) households buy resources used to produce goods and services.
Circular-Flow Diagram
A pictorial scheme of the economy, focusing on the exchange of dollars between households and firms through the market system.
Product Market
The marketplace where final goods or services are traded between sellers and consumers.
- Understand the components and structure of the circular-flow diagram.
- Identify distinctions and categorize differences between product and factor markets.
Verified Answer
EM
Emily MohrmannJul 04, 2024
Final Answer :
C
Explanation :
The product market is where households buy goods and services. This is because households are the consumers in the economy, and they purchase goods and services from businesses in the product market. The other options listed (A, B, and D) refer to the resource market, where firms buy inputs such as labor and capital from households.
Learning Objectives
- Understand the components and structure of the circular-flow diagram.
- Identify distinctions and categorize differences between product and factor markets.