Circular Flow of Goods and Services

What is the legal entity created by the household?

• Corporation

• Sole proprietorship

• Limited liability company

• Partnership

What factors of production does the household provide to the firm?

• Capital, labor, and entrepreneurship

• Labor, capital, and profit

• Entrepreneurship, land, and wages

• Land, labor, and capital

What does the firm pay the household for the building rent?

• $2,000 per year

• $1,500 per year

• $1,000 per year

• $500 per year

What does the household pay the firm for food?

• $1,500 per year

• $2,500 per year

• $2,000 per year

• $2,300 per year

What is the total revenue of the firm?

• $2,000 per year

• $3,500 per year

• $3,000 per year

• $4,000 per year

What is the total income of the household?

• $2,500 per year

• $4,000 per year

• $3,000 per year

• $3,500 per year

What is the profit of the firm?

• $400 per year

• $300 per year

• $500 per year

• $200 per year

What is the Gross Domestic Product (GDP) of the country?

• All of the above

• Total revenue of the firm

• Total income by the households

• Total expenditures by the households

What is the circular flow of goods and services between the households and the firms?

• Firms provide factors of production to the households, and households provide goods and services to the firms

• Households provide factors of production to the firms, and firms provide goods and services to the households

• Firms provide goods and services to the households, and households provide factors of production to the firms

• Households provide goods and services to the firms, and firms provide factors of production to the households

What is the total expenditures of the household?

• $2,000 per year

• $3,000 per year

• $4,000 per year

• $3,500 per year