Friday, January 31, 2014

Unit 2 - Jan 31 (Circular Flow)

Circular Flow Model represents the flow of money, goods, and services.
  • Factor Market - market where factors of production is bought and sold. (Resources)
    • Ex: Volunteering - labor
  • Product Market - market in which goods and services are bought and sold. (Goods)
    • Ex: Getting a haircut.

Economics Actors
  1. Firms - a business or organization that produces goods/services for sell. 
  2. Households - a person or group of people that share an income.

Type of Markets
  1. Traditional : All family members have the same occupation.
  2. Communist : Run by others
  3. Free Market : Make all the decisions themselves. (Hong Kong)
  4. Mixed Market : Some decisions are made by the government and some are made by the people. (U.S.)

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