ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Households then offer land, labor, and capital (known as factors) to firms so that they can then produce the goods and services. Households also offer the firms their money in the form of spending when they purchase goods.

Detailed explanation-2: -Households are sellers in the market for resources. Households sell land, labor, capital, and entrepreneurial activity in exchange for money, which in this case is called income.

Detailed explanation-3: -Household resources consist mainly of the wages earned, income from property (interest, dividends, income from land, etc.), of earnings from market production and social benefits.

Detailed explanation-4: -Imagine that our economy is composed of two sectors, which we call households and firms. Households supply labor to firms and are paid wages in return.

Detailed explanation-5: -Households, in the Resource Market (factor market), are the owners of the productive resources (factors of production) in the circular flow model. They sell their land, labor, capital, and entrepreneurship to businesses (firms) in the Resources Market in exchange for income payments.