Figure 2-16
-Refer to Figure 2-16. 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 2-16 
-Refer to Figure 2-16. 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

Market K refers to the factor markets, where factors of production (such as labor) are bought and sold. Economic agents M refers to households, who are sellers of labor in the factor markets and receive wages and salaries in return.

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