In the Circular-Flow Model, Households Supply All of the Following

question 175

Multiple Choice

In the circular-flow model, households supply all of the following except:

• A) labor.
• B) goods and services.
• C) capital.
• D) entrepreneurial ability.
• E) natural resources.

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Definitions:

Accounting Costs

The documented expenses and outlays involved in running a business, as recorded in its financial statements.

Economic Costs

The total cost of choosing one action over another, including both explicit costs (direct payments) and implicit costs (opportunity costs).

Price-Taker Market

A market structure where individual firms have no control over the price of their product, taking the market price as given.

Market Supply Curve

A graphical representation of the quantity of goods suppliers are willing to sell at different price levels.