Question

Look at the circular flow diagram. Choose and define an environmental issue. Using the diagram as a guide, explain how the environmental issue you chose affects the relationship between business and factor market.

Answer 1

Answer:

Oil spills in fishery areas.

When spills occur the affect the fauna and flora of the ocean the result is the diminish of the quantity of fish available to fishermans and in some cases the total lost of an area for fishery purposes.

This affectation of the factor market end ups creating contingencies for the business associated to the final product market in this case restaurants as the supply of certain fishes cannot be maintained and the lack of the product increase costs that would strongly impact businesses that do not have an strong financial position.