Explain the supply and demand of products, factors of production, and the payments for the products and factors of production as described in the circular flow diagram
What will be an ideal response?
Households supply the factors of production demanded by firms through the factor market. Firms pay income to the households for these factors. Firms supply the goods and services demanded by households through the product market. Firms collect revenue from the households for the goods being purchased.
Economics
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One reason that economists encourage free trade is that
A) it encourages a more rapid spread of technology. B) it allows us to exploit the workers of less developed countries. C) we can sell more goods. D) it increases our capital stock.
Economics
Which of the following is NOT correct for a perfectly competitive firm in long-run equilibrium?
A) SAC = LAC B) MR = P = AR C) MC = MR > LAC D) LAC = P
Economics