Which of the following is true according to the circular flow model?
A. Firms are suppliers in both the product and factor markets.
B. Firms are demanders in the product markets and suppliers in the factor markets.
C. Households are demanders in both the product and factor markets.
D. Households are demanders in the product markets and suppliers in the factor markets.
E. The government is a demander in the product market only.
Ans: D. Households are demanders in the product markets and suppliers in the factor markets.
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If the price of a good falls and expenditure on the good rises, the demand for the good is _______
A. elastic B. perfectly elastic C. inelastic D. unit elastic
A horizontal demand curve for a firm implies that
A) the firm is a monopoly. B) the market the firm is operating in is not competitive. C) the firm is selling in a competitive market. D) the products of that firm are very different from other firms' products.