-Refer to the Figure

question 22

Multiple Choice

-Refer to the figure.If box A represents businesses and flow (7) represents goods and services,then:

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

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Definitions:

Profit

The financial gain obtained when the revenue from a business activity exceeds the expenses, costs, and taxes.

Variable Costs

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

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business, such as rent, salaries, and insurance.

Gourmet Cupcake

A high-quality, often elaborately decorated cupcake that is made with premium ingredients and designed to cater to sophisticated palates.