Unit 2 - Micro Review

Which statement is true about the circular flow diagram?

• A  Households are demanders in the product market and suppliers in the factor market
• A  Business are demanders in the product market and suppliers in the factor market.
• A  Households are demanders in the factor market and suppliers in the product market.
•  A  Businesses and households are not components of the circular flow diagram.

Arrows 4 and 7 on this circular flow diagram demonstrate

• Goods & Services

• Expenditures

• Productive Resources

• Income

The arrows 6 to 5 in this diagram represent which aspect of the economy?

• Productive Resources

• Goods and Services

• Rent, Wages, Interest, Profit

• Revenue

In the circular flow model, what do individuals sell to the factor market

• Services
• Money
• Productive Resources
• goods

In the PRODUCT market,

• firms buy goods and services from households

• firms sell goods and services to households

• firms sell resources to households

• firms buy resources from households

The circular flow model of a market economy shows

• how profits are made
• what inputs are required for what outputs
• how many firms can support the needs of how many households
• the interactions between households and  firms in the free market

A person stocks shelves at a grocery store and receives a wage. They have completed an exchange in which part of the circular flow model?

• Individuals

• Businesss

• Factor Market

• Product Market

Someone buys a car in exchange for a large amount of money. They have completed an exchange in which part of the circuclar flow model?

• Product Market

• Factor Market

• Firms

• Individuals

Money paid by a businesses in exchange for an individual's labor

• wages

• revenue

• income

• profit

Money received by an individual from a business in exchange for their labor

• Income

• Wages

• Revenue

• Proft