--%>
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 : Elucidate the ways to finance corporate

    Elucidate the ways to finance corporate activity?

    		•
  • Q : Best illustration of a perfectly

    Which of the given is the best illustration of a perfectly competitive industry: w) wheat production. x) steel production. y) electricity production. z) airplane production. Hey friends please give your opinion for

    		•
  • Q : Determine relative price when two

    When the prices for doughnuts and croissants are $.50 and $1 correspondingly: (w) the opportunity cost for one doughnut is two croissants. (x) this is better to buy two doughnuts than one croissant. (y) one croissant will make Pierre twice as happy as one doughnut. (z

    		•
  • Q : Problem on opportunity cost buying a

    After agonizing regarding whether to buy a hot dog or a hamburger along with his last dollar while he goes to the fair, Jeeter at last chooses the hot dog. The hamburger shows Jeeter's: (i) normative choice, because it would be more nutritious. (ii) opportunity cost o

    		•
  • Q : Allocative Mechanisms-market based

    The market-based economic system: (1) Appears to be ‘natural’ as it has existed in all societies. (2) Has dominated the economic relationships in United States since from the year1492. (3) Guided resource allocation in middle ages. (4) Is

    		•
  • Q : Illustrate Economics for citizenship

    Illustrate Economics for citizenship?

    		•
  • Q : Risky forms of production to gain

    Entrepreneurs: (w) undertake risky forms of production to gain uncertain profits. (x) obtain interest payments for their services. (y) are usually overcompensated for their innovations. (z) receive virtually all their wealth by inheritance.

  • Q : Innate psychological attributes of

    As illustrated by Adam Smith that there are two innate psychological attributes of humans. One is which people have a powerful wish to better their individual circumstances. The other is as human beings so we are: (1) more interested

    		•
  • Q : Describe composite cost of capital

    Briefly describe composite cost of capital? And also describe the procedure to calculate composite cost of capital?

    		•
  • Q : Freely Floating Currency Question: For

    Question: For a freely floating currency, currency i.____________________ occurs when the market value of a country's currency rises relative to the value of another country's currency, while currency ii.__________

    		•