Which Actor in the Simplified Circular Flow Model Is on the Supply

question 12

Multiple Choice

Which actor in the simplified circular flow model is on the supply side of the factor market?

• A) Firms
• B) Households
• C) Market for goods and services
• D) Government

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Definitions:

Marginal Revenue Product

The increased earnings from adding one more unit of a resource used in production, such as capital or labor.

Marginal Revenue Product

The extra income created from the use of one additional unit of a production resource or input.

Acres

A unit of land area used in the imperial and US customary systems, equivalent to 4,840 square yards or approximately 4,047 square meters.

Marginal Revenue Product

The extra income produced by using an additional unit of a production input, like labor or capital.