In the Circular-Flow Diagram,in the Markets for

question 103

Multiple Choice

In the circular-flow diagram,in the markets for

• A)goods and services,households and firms are both sellers.
• B)goods and services,households are sellers and firms are buyers.
• C)the factors of production,households are sellers and firms are buyers.
• D)the factors of production,households and firms are both buyers.

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Definitions:

Supply

The total amount of a good or service available for purchase at any specified price.

Demand

The level of demand for a good or service, depending on consumers' readiness and capacity to buy at various prices.

Equilibrium

A state in an economy or market where demand equals supply, and there is no tendency for change.

Complements

Goods or services that are used together, where the increase in the demand for one leads to an increase in the demand for the other.