In the Circular Flow Model of the Market System, Households

question 259

Multiple Choice

In the circular flow model of the market system, households' major role is to

• A)buy both products and resources.
• B)sell both products and resources.
• C)buy products and sell resources.
• D)sell products and buy resources.

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Definitions:

Sellers

Entities or individuals who make goods or services available for purchase by consumers or businesses.

Price Elastic

A measure of how much the quantity demanded of a good responds to a change in its price; high elasticity indicates a significant change in quantity with price changes.

Supply Curve

A graphical representation of the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to supply to the market.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded.