Asked by Catherine Collins on Jul 13, 2024
Verified
Which of the following transactions does not take place in the markets for factors of production in the circular-flow diagram?
A) A construction company rents trucks for its business.
B) A farmer hires a teenager to help with harvest.
C) Anthony receives a salary for his work as an analyst for an investment firm.
D) A woman buys corn for dinner.
Markets For Factors Of Production
The markets where services of the factors of production (namely labor, capital, and land) are bought and sold.
Construction Company
A business entity focused on building, repairing, maintaining, or demolishing structures, such as buildings, roads, and bridges.
Investment Firm
A company that invests the funds of clients in a variety of assets with the goal of generating financial returns.
- Determine the individuals partaking in the economic system and their responsibilities.
- Absorb the essentials of the circular-flow diagram along with its integral components.
Verified Answer
PR
Pragnya ReddyJul 14, 2024
Final Answer :
D
Explanation :
In the circular-flow diagram, the markets for factors of production involve transactions related to the hiring of labor, renting of capital, and purchasing of land or natural resources for production purposes. Option D, a woman buying corn for dinner, is a transaction that takes place in the goods and services market, not in the markets for factors of production.
Learning Objectives
- Determine the individuals partaking in the economic system and their responsibilities.
- Absorb the essentials of the circular-flow diagram along with its integral components.