17 Questions
What is the role of households in the resource market?
They supply resources to the government
In the product market, what is the role of firms?
They supply goods and services to households
What is the primary source of finance for the government?
Households and firms paying taxes
What is the role of the government in the product market?
It supplies goods and services to households
What is the interaction between firms and households in the product market?
Firms supply goods and services to households
What is the primary function of resource markets?
To facilitate the exchange of resources
In the circular flow model, what is represented by the double-lined directed arrows?
Flow of real items
What is the primary role of the government in the economy?
To control or influence households, firms, and markets
What do firms pay to resource suppliers in the resource market?
Cost of production
In the three-sector circular flow model, what is the third sector that is added to the simple model?
Government
What is the outcome of firms combining resources and producing goods and services?
Supply of goods and services
What is the primary mechanism of economic coordination in a pure capitalist system?
Market mechanisms
What is a major disadvantage of a pure capitalist system?
Market failure
What is the primary role of the government in a command economy?
To coordinate and direct economic activities through a central planning committee
What is the main function of a firm in a mixed economy?
To use economic resources to produce goods and services
What is the main role of households in a mixed economy?
To make decisions on selling resources and buying goods and services
How many decision-making units are typically present in a closed economy?
3
Learn about the basics of economics, including the roles of firms and government, and how they interact in markets. Understand the concept of public goods and services, and the circular flow of economic activities.
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