Circular Flow Diagram

The exchange of money for goods/services to consumers is represented in which part of the circular flow diagram?

• 1 and 2

• 1 and 3

• 2 and 3

• 4 and 5

What does C represent on the Circular flow diagram?

• Apartments

• Households

• Firms

• Businesses

What are households in the circular flow diagram?

• a house and its occupants regarded as a unit

• apartments, villas, mansions

• consumer of goods and services

• businesses

What are firms in the circular flow diagram?

• a group of lawyers who work together as a business.

• solidly in place and stable

• the suppliers of the four factors of production

• the producers of goods and services

The delivery of finished products for sale in exchange for revenue is represented in which arrows?

• 5 and 6

• 3 and 4

• 4 and 5

• 7 and 8

A person stocks shelves at a grocery store and receives a wage. They have completed an exchange in which part of the circular flow model?

• Households

• Factor market

• Product market

• Firms

Someone buys a car in exchange for a large amount of money. They have completed an exchange in which part of the circuclar flow model?

• Households

• Factor Market

• Firms

• Product Market

Which statement is true about the circular flow diagram?

• Households are demanders in the product market and suppliers in the factor market

• Business are demanders in the product market and suppliers in the factor market.

• Households are demanders in the factor market and suppliers in the product market.

•  Businesses and households are not components of the circular flow diagram.

In the circular flow diagram firms pay wages for which factor of production?

• Land

• Labor

• Entrepreneurship

• Raw materials

Steel Beam Inc. is looking to purchase a new steel-processing machine and factory. In the circular flow diagram, this transaction will take place in the

• Product market.

• Resource market

• Foreign Exchange market

• Public market