What happens in the markets for factors of production?
A) Households provide firms with labour, land, and capital.
B) Households provide firms with savings for investment.
C) Firms provide households with goods and services.
D) The government provides firms with inputs for the production process.

Question

Quizplus · Accepted Answer

In the markets for factors of production, households provide firms with labour, land, and capital. This means that households are the suppliers of these factors and receive payment for providing them, while firms are the demanders of these factors and use them to produce goods and services.

What Happens in the Markets for Factors of Production