Which of the Following Statements About a Simple Circular Flow

question 183

Multiple Choice

Which of the following statements about a simple circular flow model is false?

• A) Producers are buyers in the factor market and sellers in the product market.
• B) Households are neither buyers nor sellers in the input market.
• C) Producers are buyers in the factor market.
• D) Households are sellers in the product market.

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Definitions:

Trade Discounts

Discounts from the list prices in published catalogs or special discounts offered to certain classes of buyers.

List Prices

The pre-discount price at which goods and services are listed to be sold to customers.

FOB Destination

This term refers to a shipping agreement where the seller bears the shipping costs and remains responsible for the goods until they are delivered to the buyer's location.

Purchase Discount

A deduction that a buyer receives on the invoice price of a purchase if the payment is made within a specified period.