Question

Use this circular flow diagram illustrating the roles of businesses and individuals in both the Product and Resource (factor) markets to answer the question that follows. Based on the diagram and your knowledge of economics, what conclusion can be drawn regarding the roles of businesses and households in these two markets? A) In the resource market, both businesses and households purchase productive resources from the government, which acts as a seller; in the product market, businesses act as consumers, and households act as sellers. B) In the resource market, businesses sell productive resources to households, who act as consumers in this market; in the product market, businesses act as consumers, providing households with income for goods and services. In the resource market, households sell productive resources to businesses, who act as consumers in this market in the product market, households act as consumers, providing businesses with revenue for goods and services. In the resource market, businesses act as sellers, and households act as consumers, in the product market, both businesses and households act as consumers, providing the government with revenue in exchange for goods and services. D​

Answer 1

Answer:

B) In the resource market, businesses sell productive resources to households, who act as consumers in this market; in the product market, businesses act as consumers, providing households with income for goods and services. In the resource market, households sell productive resources to businesses, who act as consumers in this market in the product market, households act as consumers, providing businesses with revenue for goods and services.

Explanation: