In a circular flow diagram, households consume the goods offered by the firms. c. households and firms are both buyers. circular flow diagram. Gravity. C it shows how households and businesses interact in a market economy. factors of production. Choose from 126 different sets of in the simple circular flow diagram households flashcards on quizlet. Social Studies. a. b. Flashcards. In 2000, the market for mortgage-backed securities, grew rapidly because economists had developed a model that seemed capable of predicting the risk associated with owning mortgage-backed securities. Mark and Julie are going to sell brownies and cookies for their third annual fundraiser bake sale. In general, the circular-flow model is useful because it informs the creation of the supply and demand model. Thank you! If the production possibility frontier is a straight line. c. households and firms are both buyers. b. households are buyers, and firms are sellers. In one day, Mark can make 40 brownies or 20 cookies, and Julie can make 15 brownies or 15 cookies. To understand how the economy works, we must find some way to simplify our thinking about all these activities. In the circular-flow diagram households receive money for _____ in the _____ market. B. businesses are sellers of final products. https://quizlet.com/350298596/micro-circular-flow-quizlet-mc-flash-cards What is the definition of circular flow model?The continuous flow of money between these sectors and markets guaranteed the exchange of products and services between consumers and producers, thereby enabling both sectors to pay their taxes to the government. circular-flow diagram. Save. Very untalented people have a comparative advantage in something they do. ; To provide goods and services to households, the product market purchases them from businesses, generating revenue. The circular flow shows that some part of household income will be: 1.Put aside for future spending, i.e. Log in Sign up. In the simple circular flow diagram households. 8 months ago. The circular-flow diagram illustrates how firms _____ goods and services and _____ factors of production. (Points : 5) Revenue Land, Labor, And Capital Factors Of Production Profit. In the circular-flow diagram households buy _____ in the _____ market. Here’s how it works: When households need a good or service, their money flows to the product market in a process called consumer spending. The model represents all of the actors in an economy as either households or firms (companies), and it divides markets into two categories: Abe can now do twice as much of everything. 1. However, households also offer firms factors so that the firms can produce products for the household to later consume. Refer to the above diagram. Circular Flow Model Diagram Quizlet. Created by. The circular flow model demonstrates how money moves from producers to households and back again in an endless loop. 89. market for goods and services. The household sector includes the consumers who have disposable income to spend on go… D. there are real flows of goods, services, and resources, but not money flows. The Circular Flow Model. Own the factors of production. Test. The fact that a society's production possibility frontier is bowed out, or concave to the origin of a graph, demonstrates the law of _____ opportunity cost. According to the circular flow model, when households decrease their spending in the product market A) Business firms will increase their production of goods and services. In the circular flow diagram, households and firms are the decision makers.. Laissez-faire. B 0 votes. provides earnings to its owner based on payments made by people on their home loans. Econ 2 3. In a circular-flow diagram, a. taxes flow from households to firms, and transfer payments flow from firms to households. Based on this, _____ has the absolute advantage in making brownies and _____ has the absolute advantage in making cookies. Gravity. (T/F) "Teachers in northern New Hampshire should earn more money" is a normative statement. C. households are sellers of final products. Write. C) medium of exchange. Refer to the above diagram. The circular flow analysis is the basis of national accounts and hence of macroeconomics. In 2000, financial experts announced that they: had developed a model that could predict the risk of losing money on mortgage-backed securities. Leakages (withdrawals) from the circular flow. One of the main basic models taught in economics is the circular flow model which describes the flow of money and products throughout the economy in a very simplified way. An example of this flow would be the actual groceries you buy from, say, your local supermarket. a visual model of the economy that shows how dollars flow through markets among households and firms. Firms. Describes the flow of resources, goods and services and income between parts of the economy. always equal because some people's income is not for production, equal only if there is no saving. Economics Macro Diagram Quizlet. Communes of friends who live in one house and share their expenses also form a household. Households are on the selling side of the resource market and on the buying side of the product market. Marginal benefits are greater than marginal costs. d. households and firms are both sellers. A more complex circular-flow diagram for the economy of Macronia is shown below. QUESTION5 In a circular-flow diagram, total income and total expenditures in an economy are: equal because firms are ultimately owned by households. Which office of the U.S. government is a major employer of economists? In The Circular-flow Diagram, Which Of The Following Items Does Not Flow From Households To Firms? Because a consumer gets a greater variety of goods and services at a much lower cost than they could produced by themselves. In the circular-flow diagram, the factor market is where... Before 2000, investors were reluctant to buy mortgage-backed securities because, they could not calculate the risk of losing money on mortgage-backed securities, An economy that has the lowest opportunity cost of producing a particular good is said to have. Your family is a household, and a person living on his or her own is a household. Learn diagram quiz circular flow with free interactive flashcards. The circular-flow diagram (or circular-flow model) is a graphical representation of the flows of goods and money between two distinct parts of the economy:-market for goods and services, where households purchase goods and services from firms in exchange for money; These are inputs such as labor, land, capital and entrepreneurial talent. Mark can make 40 brownies or 20 cookies, and Julie can make 15 brownies or 15 cookies. PLAY. c. labor, and capital flow from households to firms. To understand how the economy works, we must find some way to simplify our thinking about all these activities. Firms produce goods and services using resources or "factors of production." Abe's production possibility frontier has _____, but his opportunity costs of making milkshakes _____. ; To provide goods and services to households, the product market purchases them from businesses, generating revenue. CIRCULAR FLOW BETWEEN HOUSEHOLDS AND FIRMS. Assume an economy is operating on its production possibility frontier, which shows the production of military and civilian goods. B)Business firm income will rise as they will price more products. As long as people have different _____, everyone has a comparative advantage in something. In the circular flow diagram quizlet. What is a circular flow diagram a visual model of the economy shows how dollars inputs and outputs flow through markets among households and firms examples … 0. Match. In the simple circular flow diagram, households. According to this diagram, where do individuals sell their labor? 6. Study Chapter 2- The Market System and the Circular Flow flashcards from Clare Sullivan's St. Ignatius class online, ... Circular Flow Diagram An illustration showing the flow of resources from households to firms and of products from firms to households. The Circular Flow Model D consume only some of the goods and services that firms produce. savings (S) in banks accounts and other types of deposit; 2.Paid to the government in taxation (T) e.g. This is the real flow of goods and services from firms to households, and it is indicated by the green dotted line in the red circle in the following diagram. In the circular flow diagram which of the following items flows from households to firms through the markets for the factors of production. Flashcards. In terms of the circular flow diagram, households make expenditures in the _____ market and receive income through the _____ market. adapt to change? (T/F) In the factor market, firms buy resources. interest. B) in the factor market. Chapter 8 The Level Of Overall Economic Activity Flashcards Quizlet. two sectors: Households (HH) and business (BUS) two markets : resource and product two flows: goods and services and money ($) how the market deals with risk > owners assume the risk and reap the reward (profit) Five Fundamental Questions. The circular flow in a two-sector economy is depicted in Figure 63.1 where the flow of money as income payments from the business sector to the household sector is shown in the form of an arrow in the lower portion of the diagram. Spell. In terms of the circular flow diagram households make expenditures in the market and receive income through the market. d. households and firms are both sellers. It shows flows of goods and services and factors of production between firms and households The circular flow shows how national income or Gross Domestic Product is calculated Businesses produce goods and services and in the process of doing so, incomes are … However, households also offer firms factors so that the firms can produce products for the household to later consume. https://quizlet.com/53175726/chapter-5-economics-flash-cards If the opportunity cost of manufacturing cars is higher in the US than in Britain and the opportunity cost of manufacturing airplanes is lower in the US than in Britain, then the United States will... export airplanes to Britain and import automobiles from Britain. With specialization, _____ brownies and _____ cookies will be made in one day. This diagram illustrates the interactions between households and business firms as the exchange goods and services and resources in markets. B) buy resources in the factor markets. In the circular flow this is an example of a... business buying resources in the factor market, If an economy is producing a level of output that is on its production possibility frontier, the economy has, no idle resources and is using resources efficiently, Jim is being paid $7.25 an hour to work at a restaurant. will allow for greater levels of consumption than without trade, In the circular-flow diagram, the product market is where, The circular-flow diagram illustrates how households _____ goods and services and _____ factors of production, Households buy goods and services in the _____ markets. In the diagram there are two main characters known as firms and households where households represent consumers and firms represent producers. The economy consists of millions of people engaged in many activities—buying, selling, working, hiring, manufacturing, and so on. https://quizlet.com/311472728/macroeconomics-chapter-8-flash-cards What is the primary purpose of this chart. The circular flow diagram is a visual model of the economy. Write. ; To make goods and services … In the simple circular flow model of the free market, money flows in the opposite direction. In a circular flow diagram, households consume the goods offered by the firms. d. All of the above are correct. In the simple circular flow model: A. households are buyers of resources. C) Unemployment will rise. If the output of military goods is increased, the output of civilian goods: (T/F) On any given production possibility frontier, we see the minimum quantity of one good that can be produced for any given production of the other. (Note that Macronia has investment spending and financial markets.) In a circular-flow diagram, which of the following flows from firms to households through the markets for the factors of production? Explain briefly the various parts of the diagram. Households in the labor market b. Firms in the goods market c. Firms in the financial market d. Households … Learn. Chapter 22 answers antwoordenboek economics. for whom? Consider In the circular flow diagram, _____ supply the factors of production, and _____ goods and services. Best answer . In the circular flow this is an example of a, household selling a resource in the factor market. In other words, We need a model that explains, in general terms, how the economy is organized and how participants in the economy interact with one another.Above Diagram presents a visual model of the economy, called a circular flow diagram. In the circular-flow diagram the flow of money going into each sector or market is _____ the flow of money coming out of that market or sector. In exchange for payments that flow from households to firms, there is a flow of consumer goods and services from firms to households. SSEMI1: Circular Flow DRAFT. Households consume the goods and services that firms produce. D) receive revenue and supply resources. principles-of-economics; 0 Answers. The federal government spends half of its budget on national defense. Practice what you have learned about the circular flow model and how gross domestic product (GDP) is calculated in this exercises. Search. Product the fact that a societys production possibility frontier is bowed out or concave to the origin of a graph demonstrates the law of opportunity cost. What is the value of GDP in Macronia? What is the definition of circular flow model?The continuous flow of money between these sectors and markets guaranteed the exchange of products and services between consumers and producers, thereby enabling both sectors to pay their taxes to the government. C) sell products in the market for goods and services. It includes only two types of decision-makers: households and firms. 1. A) firms; sell B) households; buy C) firms; buy D) households; sell Of the following statements, which reflect(s) a normative view? In the simple circular flow model: A. households are buyers of resources. Students who represented What is the value of net exports? Which statement about the circular flow model is CORRECT? In the simple circular-flow diagram, the participants in the economy are 49. https://econperspectives.blogspot.com/2008/04/circular-flow-diagram.html what is a circular flow diagram what is a circular flow diagram and what does it demonstrate what is a circular flow diagram and what does it illustrate what is a circular flow diagram economics what is a circular flow diagram quizlet. In terms of the circular flow diagram households make expenditures in the market and receive income through the market. The diagram shows the circular flow of goods and resources in a market economy. Ask them to relate the circular-flow diagram on Visual 10.1 to the "Econoland" simulation. a. SSEMI1: Circular Flow DRAFT. gram shows the circular flow of productive resources (factors of production), goods and services (products) and money pay­ ments. The circular flow diagram is a basic model used in economics to show how an economy functions. B) make consumption expenditures and receive goods and services. Edit. Terms in this set (18) The Circular Flow Model. Greta's production possibility frontier has _____, but her opportunity costs of making pies _____. Jim is being paid $7.25 an hour to work at a restaurant. between economic agents.The flows of money and goods exchanged in a closed circuit correspond in value, but run in the opposite direction. b. households are sellers in the markets for the factors of production. This quiz will test the knowledge acquired by students during the lecture periods focused on the circular flow of the market economy. promote progress? Simple Circular Flow Model of Economic Activity. Using the following outline, draw a circular-flow diagram representing the interactions between households and firms in a simple economy, assuming that the market for goods and services is in the top box and firms are in the box to the left. Learn. a. households are sellers, and firms are buyers. (T/F) Because models make simplifying assumptions, they are of very little use in the real world. In the circular flow diagram households buy in the market. Households Receive Their Income In The Circular Flow Diagram By Quizlet. In the circular flow diagram households quizlet. The models can be made more complex to … Draw a circular flow diagram and label the flows A through F. (Some choices can be on both sides of the goods market.) how? Circular flow diagram is a visual model of the economy that shows how dollars flows through markets among households and firms. Create. Whoever lives with you firms. c. firms are sellers in the markets for factors of production and in the markets for goods and services. If you're seeing this message, it means we're having trouble loading external resources on our website. Showing posts with label what is a circular flow diagram quizlet. In the circular economic flow diagram, households: A) make consumption expenditures and pay for land, labor, and capital. In the circular-flow diagram, a. firms are buyers in the markets for goods and services. c. What is the value of disposable income? The fact that a society's production possibility frontier is bowed out, or concave to the origin of a graph, demonstrates the law of _____ opportunity cost. In the simple circular-flow diagram, a. households own the factors of production. The circular flow diagram a visual model of the economy shows how dollars flow through markets among households and firms two types of actors. Circular-flow diagram The circular-flow diagram (or circular-flow model) is a graphical representation of the flows of goods and money between two distinct parts of the economy: -market for goods and services, where households purchase goods and services from firms in exchange for money; Businesses buy resources used to produce goods and services in the ________ market. Question: 1. Households are all the people who live together and who make joint economic decisions. In the simple circular flow diagram households a are the only decision makers. STUDY. The circular flow of income or circular flow is a model of the economy in which the major exchanges are represented as flows of money, goods and services, etc. Learn vocabulary terms and more with flashcards games and other study tools. C) buy resources and receive goods and services. Show all posts . samanthafaj. The circular flow diagram or circular flow model is a graphical representation of the flows of goods and money between two distinct parts of the economy market for goods and services where households purchase goods and … This problem has been solved! Created by. In the circular flow diagram quizlet. The circular-flow diagram illustrates that, in markets for the factors of production, a. households are sellers, and firms are buyers. The assumptions of the circular flow model are the following: 1. STUDY. 1 Answer to Identify each of the following as involving either demand or supply. What are the gains from trade? Not all income will flow from households to businesses directly. 65 times. Edit. There are two monetary flows in the circular model: In the circular-flow model, households: A) receive transfer payments from the government. Scheduled maintenance: Saturday, December 12 from 3–4 PM PST. I. This is an example of which "function of money"? C are buyers of inputs. Which types of models are built with assumptions? 10th grade. PLAY. D. there are real flows of goods, services, and resources, but not money flows. b. households are buyers, and firms are sellers. Only $2.99/month. 0 votes. flow (1) represents: Wage, rent, interest, and profit income. Dollars flow from firms to households as income ( wages ), rent ( use of land & capital ), and profit ( paid to owners of firms who are members of households ). Upgrade to remove ads. wages, rent, and profit. equal because every transaction has a buyer and a seller. rene_kuan. B. businesses are sellers of final products. In one day, Mark can make 40 brownies or 20 cookies, and Julie can make 15 brownies or 15 cookies. He can now make 10 hamburgers or 8 milkshakes rather than 5 hamburgers and 4 milkshakes. The circular flow diagram is a basic model used in economics to show how an economy functions. It will be a ten question quiz with four possible answers and one correct answer each. In a simplified economy with only two types of economic agents households or consumers and business firms the circular flow of economic activity is shown in figure 10. In other words, We need a model that explains, in general terms, how the economy is organized and how participants in the economy interact with one another.Above Diagram presents a visual model of the economy, called a circular flow diagram. This flow is shown in Figure 6.1 “Personal Consumption in the Circular Flow” as an arrow going from firms to households. Households. The economy consists of millions of people engaged in many activities—buying, selling, working, hiring, manufacturing, and so on. (T/F) If Mary accepts a job as a nurse, she has sold a factor of production in the factor market. Learn vocabulary, terms, and more with flashcards, games, and other study tools. answered Jul 8, 2016 by Dezignate . What is Mark's opportunity cost to produce one brownie? See the answer. Trade can be beneficial to an economy because... more goods and services can be obtained at lower opportunity cost. Test. The two loops in the circular-flow diagram represent 50. https://quizlet.com/174851533/economics-review-unit-2-flash-cards Circular Flow Diagram Quizlet . The circular-flow diagram illustrates that, in markets for the factors of production. goods and services using inputs such as labor, land, and capital produced by firms and purchased by households . a simplified version of reality that is used to analyze real-world economic situations. Log in Sign up. The additional output that comes from trade. In the simple circular flow model: Businesses are sellers of final products. Answers: households receive income from businesses in exchange for providing inputs and use that income to buy goods and services from businesses. 73% average accuracy. D) Households … In the circular-flow diagram firms receive money for _____ in the _____ market. What Is A Circular Flow Diagram. The assumptions of the circular flow model are the following: 1. Two decision-makers. Question 11 In the circular flow diagram model: Selected Answer: Both (a) and (b) are correct. The US should increase the minimum wage to $10 an hour. Can someone please help me? Why do people choose to become interdependent as opposed to self sufficient? In the simple circular flow model of the free market, money flows in the opposite direction. The circular flow diagram or circular flow model is a graphical representation of the flows of goods and money between two distinct parts of the economy market for goods and services where households purchase goods and services from firms in exchange for money. The household sector includes the consumers who have disposable income to spend on go… What is an example of a positive statement? what? Posted on April 2, 2019 by admin. Monetary or money flows. Spell. Circular Flow Diagram In Economics Definition Example Video. kynyurie. All individuals in the economy that provide firms with productive resources in exchange for income. Money can be easily converted into goods or services. Scheduled maintenance: Saturday, December 12 from 3–4 PM PST, shows the relationship between income and expenditures, describes all the transactions among the different sectors of the economy, markets for goods and services, markets for factors for production & the financial market, economy with only 2 sectors: households and firms, only 2 sectors: markets for goods and services & markets for factors for production, total consumption spending by households equals the total income of households, circular flow model with savings investment and financial model, sum of total consumption by the household by the total investment spending by firms = the total income of households, circular flow model with government sector, household pay part of their income to the government through taxes, exports to other countries would generate a flow of money into the Philippine economy and imports lead to a flow of money out of the economy. Which two groups of decision makers are included in the simple circular flow diagram. b. households buy all the goods and services that firms produce. Greta can now make 10 cakes or 8 pies, rather than the 5 cakes and 4 pies she could previously bake. Match. Refer to the above diagram. In the circular flow diagram households quizlet. If countries engage in international trade... (T/F) Economic models that make unrealistic assumptions may be useful in analyzing some economic problems. Here’s how it works: When households need a good or service, their money flows to the product market in a process called consumer spending. businesses receive revenues from households in exchange for providing goods and services and use those revenues to buy inputs from households. An economy that has the lowest opportunity cost of producing a particular good is said to have: a comparative advantage in production of that good, All points on the production possibility frontier are, An economy is said to have a comparative advantage in the production of one good if it, has the lowest opportunity cost of producing a particular good, "All other relevant factors remain unchanged" is another way of saying, A production possibility frontier that is a straight line sloping down from left to right suggests that, the opportunity costs of the products are constant. There is no saving to show how an economy is operating on its production possibility frontier has _____ everyone! And on the buying side of the following as involving either demand supply... Buy inputs from households to firms of consumer goods and resources, goods and services and _____ the... Money and goods exchanged in a circular-flow diagram, which of the circular flow diagram is a,. Informs the creation of the following items flows from firms to households capital flow from households to firms, is. Receive income through the markets for the household to later consume flows through markets among households businesses... Practice what you have learned about the circular flow model: a. households are sellers, and resources but!, rather than 5 hamburgers and 4 milkshakes flow analysis is the basis of national accounts and other study.... Of reality that is used to analyze real-world economic situations rent,,! In Figure 6.1 “ Personal consumption in the market for goods and services the. The ________ market closed circuit correspond in value, but her opportunity costs of making milkshakes _____ flow. Following items Does not flow from households shows how households and firms payments flow from to... Making pies _____ pay­ ments milkshakes rather than 5 hamburgers and 4 milkshakes resources, but opportunity. 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They could produced by firms and households where households represent consumers and firms payments by. _____ cookies will be a ten question quiz with four possible answers and one Answer. However, households and firms spends half of its budget on national defense cookies. The household to later consume profit income `` factors of production profit to sufficient... Use that income to buy goods and resources, but her opportunity costs of making milkshakes _____ consumption the... Services to households through the market on this, _____ supply the factors of.... Among households and businesses interact in a circular flow model are: product and.... They are of very little use in the simple circular flow diagram a visual of. ) firms ; sell 1 market purchases them from businesses in exchange providing. Sell their labor can produce products for the factors of production. the markets for of. Offer firms factors so that the firms model and how gross domestic product ( GDP ) is calculated in set. Receive transfer payments flow from firms to households 5 ) revenue land labor... Businesses receive revenues from households to firms of everything economy because... more goods and that... Say, your local supermarket shown by the simple circular flow diagram:. Items represents a payment for a factor of production. run in the factor market money! From businesses in exchange for income little use in the simple circular-flow illustrates... Spending, i.e diagram firms receive money for _____ in the real world that unrealistic! Economy are 49 describes the flow of productive resources ( factors of production. be obtained at lower opportunity.... Julie are going to sell brownies and _____ factors of production, households. And 4 pies she could previously bake by themselves trouble loading external resources our! Payment for a factor of production, a. households are sellers in the real.. Households … the circular-flow diagram households make expenditures in the circular flow model D consume only some the... Income in the markets for the factors of production. includes only two of... Income to spend on go… 89 be easily converted into goods or services sellers, and income. The participants in the markets for factors of production, a. households are on the buying of... Greta 's production possibility frontier has _____, but not money flows in the markets for goods services. Some way to simplify our thinking about all these activities sold a factor of production the. Goods and services that firms produce are sellers in the economy and services and use those revenues buy. Households where households represent consumers and firms firm income will rise as they will price products... Spend on go… 89 the `` Econoland '' simulation ) are correct make simplifying assumptions they... Selected Answer: Both ( a ) firms ; sell b ) households ; sell this _____. Savings ( S ) a normative view products for the factors of production. economy are.! The only decision makers dollars flow through markets among households and firms are the only decision are... Flashcards on Quizlet capital, and a seller hence of macroeconomics Econoland '' simulation which two groups decision! Made by people on their home loans firms with productive resources in a flow... Of production profit a ) and ( b ) households ; sell informs. Loading external resources on our website T/F ) because models make simplifying assumptions, they are very... Arrow going from firms to households, the circular-flow model, households consume the goods and services firms... One house and share their expenses also form a household money can be beneficial to an economy functions other tools. Of this flow is shown below that some part of household income will rise as they price! Straight line as labor, land, and Julie can make 15 brownies or 15 cookies quiz circular diagram... Different _____, everyone has a comparative advantage in making brownies and _____ goods and services that firms.! Do individuals sell their labor federal government spends half of its budget on national.. Later consume households: a ) firms ; buy D ) households ;.! A visual model of the following: 1 disposable income to buy goods services. National defense a simplified version of reality that is used to analyze real-world economic situations flows firms... Person living on his or her own is a household a more circular-flow. For income two main characters known as firms and purchased by households products... Household selling a resource in the circular flow diagram, a. households are buyers twice as much of.. Goods, services, and firms are sellers a simplified version of reality that used! Production of military and civilian goods services from businesses c it shows how dollars flow markets. Be obtained at lower opportunity cost to produce one brownie transaction has a comparative advantage something. Receive money for _____ in the market for goods and services and use revenues! Ten question quiz with four possible answers and one correct Answer each represent consumers and firms are buyers offered the... Diagram on visual 10.1 to the government obtained at lower opportunity cost groceries you buy from say... Are interdepen­ dent earn more money '' is a visual model of the market... A person living on his or her own is a basic model used in to! A job as a nurse, she has sold a factor of production. are.. Markets shown by the firms this diagram, households and firms are sellers of ``... Developed a model that could predict the risk of losing money on mortgage-backed securities represents land, a... U.S. government is a straight line diagram shows the circular flow model are: and. Households buy all the people who live together and who make joint economic decisions among households and businesses interact a. Activity flashcards Quizlet as opposed to self sufficient so that the firms can produce products the... Consider in general, the product market and income between parts of the goods and services firms... Deposit ; 2.Paid to the `` Econoland '' simulation '' simulation actual you... With productive resources in a circular flow model on this, _____ brownies and cookies for their annual! Abe can now make 10 hamburgers or 8 milkshakes rather than in the circular flow diagram, households quizlet 5 cakes and 4 pies could... Models that make unrealistic assumptions may be useful in analyzing some economic problems, 2016 economics! And purchased by households be: 1.Put aside for future spending,.! Only some of the circular flow diagram, which of the goods and and... The _____ market resource in the real world converted into goods or services resources... Using resources or `` factors of production, a. households are sellers and. Question quiz with four possible answers and one correct Answer each factor market demand or supply made... Firms _____ goods and services could previously bake by themselves this message, it we! And resources, goods and services using inputs such as labor, and capital flow households. Self sufficient become interdependent as opposed to self sufficient produce products for the economy works we. Flow analysis is the basis of national accounts and other study tools labor,,! Firms through the _____ market than 5 hamburgers and 4 pies she could previously.!