Wednesday, February 28, 2018

Unit 2: Topic 1: Circular Flow

Circular Flow

Household- It is a person or a group of people who share an income.

  • sell resources, buy products.

Firms- An organization that produces goods and services for sale.

  • buy resources, sell products

Factor (Resource) Market- This is where factors of production are sold. Bought by firms and sold by households. Factor of production: land. labor, entrepreneurship, capital (human, physical)



  • Firms buy.
  • Household sell.
    • Product Market- The market where goods and services are bought and sold.

    • Firms sell.
    • Household buy

    Factor payments-

    • LAND- rent
    • LABOR- wages
    • CAPITAL- interests
    • ENTREPRENEURSHIP- profits

    at

    1 comment:

    1. UnknownMarch 1, 2018 at 7:54 AM

      Cute blog! I like how you added the picture of the notes we did because it helps me understand it so much better. I will definitely use your blog to help me study for the test! Remember the acronym to remember factor payments is WRIP (Willy Rest In Peace)

      ReplyDelete

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