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Term
We begin by sorting individuals into Factors of production in the economy are lumped into three broad categories, land, labor and capital. The names for the prices of labor, land and capital are wages, rent and profit. two groups:
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2. |
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Good and services only flow around the economy in one direction; money flows in the ______direction.
Idea: |
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Definition
opposite
Idea: Money is normally exchanged for goods and services, or resources. |
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Term
Factors of production in the economy are lumped into three broad categories:
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3. |
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The names for the prices of labor, land and capital are
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2.
3. |
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| In this model, ________ own all the labor, land and capital. |
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| In markets for factors of production, households _____ the services of labor, land and capital in exchange for wages, rent and profits. |
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| -What are the two functions of households in the economy? |
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Definition
1. to sell their labor, land, and capital, in order to make income,
2. they spend their income on the goods and services that firms produce. |
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| What are the two functions of firms in the economy? |
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Definition
1.They purchase the services of labor, land and capital
2. They use the labor, land and capital to produce goods and services, which they sell to households. |
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