The order for an economy to be successful, there must be some form of organization. Firms produce products that are marketed and sold. There must be people with to purchase and consumed the products that are produced by the forms. This group of individuals that consumes the products that are produced in a market economy are known as households. Which all the following is the n market economy?

1. All households except the very wealthy are constrained by limited incomes.

2. A household is often the primary production unit in a market economy.

3. A household demands goods and services from the market and supplies factor inputs.

4. A households is best represented by a married couple with two cats and a dog.

Question

Business

Landon Cooper

5 October, 02:13

The order for an economy to be successful, there must be some form of organization. Firms produce products that are marketed and sold. There must be people with to purchase and consumed the products that are produced by the forms. This group of individuals that consumes the products that are produced in a market economy are known as households. Which all the following is the n market economy?

1. All households except the very wealthy are constrained by limited incomes.

2. A household is often the primary production unit in a market economy.

3. A household demands goods and services from the market and supplies factor inputs.

4. A households is best represented by a married couple with two cats and a dog.

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Answers (1)

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Snow White · Answer 1

1. All households except the very wealthy are constrained by limited incomes.

See explanation below.

Explanation:

Previous concepts

By definition a market economy is an "economic system in which economic decisions and the pricing of goods and services are guided by the interactions of a country's individual citizens and businesses".

Based on this definition we can analyze one by one the possible options:

1. All households except the very wealthy are constrained by limited incomes.

We know that a market economy is a "type of economic system where price and output decisions are established by the interaction of the buyers and sellers of the product".

And in this economic system, income must be limited for most people, since business owners take most of the income.

2. A household is often the primary production unit in a market economy.

False the primary production is the primary sector and who produce the principal goods in the economy

3. A household demands goods and services from the market and supplies factor inputs.

False, is not just a procedure related to demand and supply, we have interaction between the parts. Usually there are interactions between the people and the businesses.

4. A households is best represented by a married couple with two cats and a dog.

False, that's a preconcept that is not required in order to have a market economy we can have families with more than 2 people or a single person that's not too important.