(Solved): Instruction: To improve your analytical/reasoning skills, discuss about circular flow diagram and t ...

Instruction: To improve your analytical/reasoning skills, discuss about circular flow diagram and the production possibility frontier by addressing the set of questions listed below. Revenue MARKETS FOR Spending Goods GOODS AND SERVICES - Firms sell -Households buy and services sold MARKETS Labor, land, and capital FOR FACTORS OF PRODUCTION Wages, rent, Households sell Firms buy Income and profit -Flow of inputs and outputs -Flow of dollars 1. Using the above graph, describe what do households sell in the resource market? 2. Using the above graph, describe what do business firms sell in the product market? 3. Briefly discuss, how are economic fluctuations linked among national FIRMS Produce and sell goods and services Hire and use factors of production Factors of production Goods and services bought HOUSEHOLDS Buy and consume goods and services Own and sell factors of production