In input, or factor, markets, select one: a. consumers purchase products b. firms supply goods c. households supply resources d. households demand goods
Understand the Problem
The question is asking about activity in input or factor markets. Input markets are where factors of production (like labor, capital, and raw materials) are bought and sold. The question requires selecting the option that accurately describes the transaction in an input or factor market.
Answer
C. households supply resources.
The correct answer is C: households supply resources. In factor markets, households provide resources like labor, land, and capital to firms.
Answer for screen readers
The correct answer is C: households supply resources. In factor markets, households provide resources like labor, land, and capital to firms.
More Information
Factor markets are also called input markets. Households provide resources e.g. labor. Firms demand these resources to produce goods or services.
Tips
A common mistake is confusing factor markets with product markets. Factor markets are where resources are exchanged, while product markets are where goods and services are exchanged.
Sources
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