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Chapter 1: Problem 16

Are households primarily buyers or sellers in the goods and services market? In the labor market?

Short Answer

Expert verified
In the goods and services market, households primarily act as buyers, purchasing goods and services to satisfy their needs and wants. In the labor market, households primarily act as sellers, supplying their labor, skills, and talent in exchange for wages and other compensation.

Step by step solution

01

Goods and Services Market

In the goods and services market, households are primarily buyers. They buy goods and services provided by firms to satisfy their needs and wants, such as food, clothing, electronics, and entertainment services. On the other hand, firms are the ones who produce goods and provide services, and they act as sellers in this market.
02

Labor Market

In the labor market, households are primarily sellers. They supply their labor, skills, and talent in exchange for wages and other compensation. Firms, on the other hand, are the ones who require labor and skills to produce goods and provide services, and they act as buyers in this market, offering employment opportunities. To summarize, households are mainly buyers in the goods and services market and sellers in the labor market.

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