--%>
Assignment Help - homework help

Distinguish between the resource market and product market

Distinguish between the resource market and product market in the circular flow model.  In what way are businesses and households both sellers and buyers in this model?  What are the flows in the circular flow model?

E

Expert

Verified

The resource markets are where the owners of the resources (the households) sell their resources to the buyers of the resources (businesses).  In the merchandise markets, businesses sell the goods and services they have produced to the buyers of the goods and services, the households. Households (individuals) either own all economic resources directly or own them indirectly through their ownership of business corporations.  These households are willing to sell their resources to businesses because attractive prices draw them into specific resource markets.  Businesses buy resources because they are necessary for producing goods and services. The interaction of the buyers and sellers establishes the price of each resource.

In the product market, businesses are the sellers and householders are the buyers; their role in the market has been reversed.  Each group of economic units both buys and sells. One flow is the flow of real goods and services (including resource services) and the other flow is the flow of money (revenue, money income, production costs, consumption expenditures).

   Related Questions in Business Economics

  • Q : Illustrates inverse relationship

    Illustrates the inverse relationship between price and quantity?

    		•
  • Q : Describe financial leverage and low

    Describe briefly high financial leverage, low operating leverage?

    		•
  • Q : Higher opportunity costs of attendance

    Economics professors would attribute students’ higher rates of attendance on days while examinations are administered to the: (w) intensified needs to learn valuable material. (x) higher opportunity costs of missing set relative to other schedul

    		•
  • Q : Example of self interest to define

    The concept of _____ was demonstrated by _____ along with the quotation, “The defeat of a bit finger would remain the average European from sleeping which night,... but, given he never saw them, he will snore along with the most profound security over the loss o

    		•
  • Q : Illustrate the term Economic Rationale

    Illustrate the term Economic Rationale?

    		•
  • Q : Describe the duty of bondholders in a

    Describe the duty of bondholders in a bond?

    		•
  • Q : Market structure and pricing decision

    Just need help to see if I am in the right direction if there any think wrong need help with it.

    		•
  • Q : Decreases in opportunity costs of

    The opportunity costs of production and consumption for most resources and goods tend to be decreased by: (w) private monopoly power. (x) price floors. (y) intense competition. (z) price ceilings. Hey friends pleas

    		•
  • Q : Adopting policy of paying efficiency

    The expected losses to workers by shirking are increased while a firm adopts a policy of: (1) dividing productive tasks therefore the division of labor is optimal. (2) paying efficiency wages that exceed market-clearing wages. (3) avoiding legal liability from not wri

    		•
  • Q : Resource market for economic capital

    Janet has loaned a start-up coffee house $50,000 and predicts to earn interest from her financial investment. In circular flow model this transaction is an illustration of: (1) An exchange of her saving for interest, via a resource market for the economic capital. (2)

    		•