In the Expanded Circular Flow Diagram, the Government Supplies

question 138

Multiple Choice

In the expanded circular flow diagram, the government supplies

• A) goods and services to the product market.
• B) factors of production to the factor market.
• C) goods and services to households.
• D) factors of production to firms.

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Definitions:

Contribution Margin

Contribution Margin represents the portion of sales revenue that is not consumed by variable costs and contributes to covering fixed costs.

Machine Minutes

A measurement of time expressing the operation of a machine in minutes.

Unlimited Demand

A theoretical concept where there is no upper limit to the quantity of a good or service that consumers wish to purchase, at a zero price point.

Materials Costs

The cost of raw materials used in the production of goods, a major component of the total manufacturing cost.