households what are “households” in terms of the circular flow of the economy? people workers...
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Households
What are “Households” in terms of the Circular Flow of the Economy?
PEOPLE
Workers
Land Owners
Investors
Renters
Home Owners
Families
You & MeEntrepreneurs
Firms
What are “Firms” in terms of the Circular Flow of the Economy?
LARGE FACTORIESTHAT PRODUCE GOODS
BUSINESSESTHAT PROVIDE SERVICES
An Artisan who makes small number of finely crafted products
An individual who works out of their home
Businesses that sell things that they import or buy
Employer
Market – A place that brings buyers and sellers together
The Goods & Services
Market
Goods & Services are soldBy the firm
to the Household
Money goes from the Household
to the Firm to buy the goods & Services
Households Firms
GOODS & SERVICES
BUYS SELLS
$ FOR GOODS & SERVICES
The Goods & Services Market
NATURALRESOURCES
Factors of Production(RESOURCES USED TO PRODUCE GOODS AND SERVICES)
LAND LABOR
The Factors of Production Market
CAPITALMENTAL,PHYSICAL
OR SKILLEDWORK FOR
WAGES
BUILDINGS, MACHINERY, TOOLS
USED TO PRODUCE GOODS
& SERVICES
Households Firms
FACTORSOF PRODUCTION
BUYSSELLS$ PAID FOR FACTORS
OF PRODUCTION
The Factors of Production Market
LAND LABOR CAPITAL
WagesWages, Rents, Interest, ProfitsInterest ProfitsRents Rents ProfitsProfitsProfits
Both the Goods and Services Market and the F.O.P. Market occur simultaneously
Households Firms
The Goods & Services Market
TAXES$
GOVERNMENTSERVICES
Market – A place that brings buyers and sellers together
The Goods & Services
Market
Goods & Services are soldBy the firm
to the Household
Money goes from the Household
to the Firm to buy the goods & Services
Households FirmsThe
Goods & ServicesMarket
Goods & Services are soldBy the firm
to the Household
Money goes from the Household
to the Firm to buy the goods & Services
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