Figure 2-15
-Refer to Figure 2-15. One segment of the circular flow diagram in the figure shows the flow of wages and salaries from market K to economic agents M. What is market K and who are economic agents M?
A) K = factor markets; M = households
B) K = product markets; M = households
C) K = factor markets; M = firms
D) K = product markets; M = firms

Question

Figure 2-15 
-Refer to Figure 2-15. One segment of the circular flow diagram in the figure shows the flow of wages and salaries from market K to economic agents M. What is market K and who are economic agents M?
A) K = factor markets; M = households 
B) K = product markets; M = households 
C) K = factor markets; M = firms 
D) K = product markets; M = firms

Quizplus · Accepted Answer

In the circular flow diagram, factor markets are where resources, including labor, are bought and sold. Households provide labor and receive wages and salaries, making them economic agents M.

Figure 2-15 -Refer to Figure 2-15. One Segment of the Circular Flow