Question

name a way

3. Show all CUTION 4. Name a way that your family interacts in the factor market and a way that it interacts in the product market

Answer 1

Solution:

Factor Market refers to the market which deals with factors of production. Factors of production are those which contributes to the production of goods and services. Some of the common factors of production are land, labor, capital, raw material.

Here, the businesses buy or acquire from society and pay them back in the form of factor payment. Some of the common factor payments are rent, interest, wages & salary, profits.

Businesses use these factors of production and convert them into final products.

Product Market refers to the market which deals with goods and services manufactured (rendered) by the Businesses using factors of production. These goods are sold back to the society. In return, people pay the price for that good or service.

==> A family can interact in the factor market in the following ways:

a) Working as labor or employee

b) Lending out your land or property to the company (businesses)

c) Providing financial resources to the company (businesses)

==> A family can interact in the product market in the following ways:

a) Purchasing goods

b) Receiving services

==> Anyone from the above option in both categories will be an appropriate way to interact in respective markets.