Answer:
a. They are what households or firms pay for products or resources.
Explanation:
The circular flow model shows how money flows in the society, from producers to workers in the form of wages, and back to the producers as money paid for products thereby providing exchange between the household and the firm.
The household work for firms in exchange for money to pay for goods and services offered by the firm while the firm sell there goods to the household so as to be able to generate profits.
Answer:
e. Liabilities Net Income
Overstated No Error
Explanation:
Unearned Revenue is a liability account that is used to record revenue that the business has received but not yet earned because the goods and services have not yet been provided. By crediting Accrued revenue to this account, it increases it when it is not supposed to so Liabilities are overstated.
Accrued Revenue go to the Accounts Receivable section of the balance sheet to indicate that the business is owed for goods or services provided and so have nothing to do with Net Income so there is no error there.
The private market will produce more than the economically efficient output level. Also when there is a negative externality then the cost to producers will be less than the cost to society. Remember that a negative externality is a cost that is suffered by a third party as a result of an economic transaction. Also have in mins that externalities lead to market failure<span> because the price equilibrium </span>does<span> not reflect the true costs and benefits of a product.</span>
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