Households Are Vital to the Circular Flow Model in Which

question 4

Multiple Choice

Households are vital to the circular flow model in which two ways?

• A) They supply factors of production and purchase goods and services.
• B) They export and import goods and services.
• C) They vote for political officers and pay taxes.
• D) They facilitate exchange between consumers and firms and supply funds.

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Definitions:

Profit-maximizing

The method of modifying manufacturing and selling tactics to obtain the maximum profit achievable.

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.

Marginal Cost

Refers to the increase in total production cost that comes from making or producing one additional unit.

Increased By

A mathematical operation indicating that a certain value should be added to another value, resulting in a larger amount.