Figure 2-16
-Refer to Figure 2-16. One segment of the circular flow diagram in the figure shows the flow of labor services from market K to economic agents J. What is market K and who are economic agents J?
A) K = factor markets; J = households
B) K = product markets; J = households
C) K = factor markets; J = firms
D) K = product markets; J = firms

Question

Figure 2-16 
-Refer to Figure 2-16. One segment of the circular flow diagram in the figure shows the flow of labor services from market K to economic agents J. What is market K and who are economic agents J?
A) K = factor markets; J = households 
B) K = product markets; J = households 
C) K = factor markets; J = firms 
D) K = product markets; J = firms

Quizplus · Accepted Answer

In the circular flow diagram, factor markets are where resources, including labor, are bought and sold. Firms are the economic agents that hire labor services from these markets.

Figure 2-16 -Refer to Figure 2-16. One Segment of the Circular Flow