Figure 2-17 -Refer to Figure 2-17. in the Circular Flow Diagram, Who

question 256

Multiple Choice

Figure 2-17
-Refer to Figure 2-17. In the circular flow diagram, who are economic agents A and who are economic agents B?

• A) A = firms; B = households
• B) A = households; B = firms
• C) A = households; B = factor markets
• D) A= firms; B = product markets

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Definitions:

Fixed Cost

Costs that do not vary with the level of output, remaining constant even if production is zero.

Variable Costs

Costs that change in proportion to the level of production or business activity, such as materials and labor directly involved in manufacturing.

Lawn-mowing

The act of cutting the grass of a lawn to maintain its appearance and health.

Perfectly Competitive

A market structure where there are many buyers and sellers, all of whom have negligible impact on the market price.