M.3 Unit 3 The Circular Flow Model

Review on Trade-offs and Incentives

Draw

Draw your idea of trade-off

Open Ended

What is incentives?

Unit 3

The Circular flow Model

Learner's outcome

​1. Describe the circular flow model

​2. Identify the sectors in the circular flow model

​

Word Concept

1. Household - are economic units formed by living together in one house , such as family

​

2. Businesses​ - are economic units that produce goods and services for sale

Open Ended

Can households be business owner too?

• The third unit or sector in the circular flow model.

• It collects taxes from households and businesses

• The ​government uses the collected taxes to provide public utility goods that are available for everyone to use

​

​3. Government

A representation of the movement of products, resources and money in an economy between three economic sectors, namely households, businesses and government

Circular Flow Model

Market - where buyers and sellers come together

1. 1 Resource market- is where households sell the factors of production (land, labour, capital), that is, their skills, and assets, to businesses

Some text here about the topic of discussion

1. 2 product market - is where businesses sell finished goods and services to households

​Any question/s?