Unit 3: Supply, Demand, and Consumer Choice

The Circular Flow Model The Product Market- The “place” where goods and services produced by businesses are sold to households. The Resource (Factor) Market- The “place” where resources (land, labor, capital, and ent.) are sold to businesses.

DEMAND SUPPLY Individuals Businesses SUPPLY DEMAND Resource Market $$$ Costs $$$ $$$ Income $$$ Resources Resources (Factors of Production) Individuals Businesses Goods and Services Goods and Services $$$ Spending $$$ $$$ Revenue $$$ SUPPLY DEMAND Product Market 3