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    1.0 Circular Flow Practice Activity

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    Rafael Tristan
    This document contains an incomplete circular flow model diagram and questions about the roles of households, firms, resource markets, product markets, and the functions of money and prices within the circular flow model. It asks about the goals of households and firms in a market economy and the role of government. Finally, it inquires about the effects of free international trade on a nation's circular flow.

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    © All Rights Reserved
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    1.0 Circular Flow Practice Activity

    Uploaded by

    Rafael Tristan
    36 views4 pages
    This document contains an incomplete circular flow model diagram and questions about the roles of households, firms, resource markets, product markets, and the functions of money and prices within the circular flow model. It asks about the goals of households and firms in a market economy and the role of government. Finally, it inquires about the effects of free international trade on a nation's circular flow.

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    1.0 Circular Flow practice activity

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    This document contains an incomplete circular flow model diagram and questions about the roles of households, firms, resource markets, product markets, and the functions of money and prices within the circular flow model. It asks about the goals of households and firms in a market economy and the role of government. Finally, it inquires about the effects of free international trade on a nation's circular flow.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    36 views4 pages

    1.0 Circular Flow Practice Activity

    Uploaded by

    Rafael Tristan
    This document contains an incomplete circular flow model diagram and questions about the roles of households, firms, resource markets, product markets, and the functions of money and prices within the circular flow model. It asks about the goals of households and firms in a market economy and the role of government. Finally, it inquires about the effects of free international trade on a nation's circular flow.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    Welker’s Wikinomics practice activities

    1.0 Introduction to Economics


    The Circular Flow

    Directions: Answer the questions below

    Resource B:________
    B:________ market __
    __
    A:________ A:________
    __ __

    Firms Households

    C:________ C:________
    __ __
    D:________ D:________
    __ Product __
    market

    1. Identify the missing components of the circular flow model above.


    A.

    B.

    C.

    D.

    2. In the resource market:


    a. What is the role of firms?

    b. What is the households?


    Welker’s Wikinomics practice activities

    3. In the product market:


    a. What is the role of firms?

    b. What is the role of households?

    4. Give three examples of resource markets:


    1.

    2.

    3.

    5. Give three examples of product markets:


    1.

    2.

    3.

    6. What determines the amount of income a household will earn in the resource market?
    Why do some households earn higher incomes than others?
    Welker’s Wikinomics practice activities

    7. What determines the amount of money a firm will earn in the product market? Why do
    some firms earn so much more money than others in a market economy?

    8. What is the goal of a household in a market economy? Based on this simple goal, what
    is the best way for a household to achieve it?

    9. What is the goal of a firm in a market economy? How can a firm best achieve this goal?

    10. What makes the exchanges that take place in a market economy “mutually beneficial”?

    11. What role does money play in the circular flow model?

    12. What role do prices play in the circular flow model?


    Welker’s Wikinomics practice activities

    13. What role or roles do you think the government should play in a market economy?

    14. What would happen to the circular flow of a nation’s economy if the nation opened up to
    free, international trade with the rest of the world?

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