-Refer to the Figure

question 106

Multiple Choice

-Refer to the figure.If box B represents the factor market and flow (3) represents money income,then:

• A) box A is the product market and box C is households.
• B) box C is the product market and box A is households.
• C) box D is the product market and box C is households.
• D) box C is the product market and box D is households.

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Definitions:

Normal Profits

The level of profit that business owners consider satisfactory or "normal", essentially covering both explicit and implicit costs, including a normal rate of return on investment.

Accounting Profits

The total revenue of a business minus the explicit costs; it's the profit figure calculated according to generally accepted accounting principles.

Total Revenues

The overall income generated by a firm or economy from its business activities, including sales of goods and services, before any expenses are deducted.

Marginal Returns

The additional output that is produced by using one more unit of a variable resource, keeping all other inputs constant.