8.1 Economic activity

Question 1

Households

Answer 1

Owners of the factors of production.

Factors of production:
(Land, Labour, Capital and entrepreneurship) for producers.

Question 2

Firms

Answer 2

Buy factors of production

and sell Goods and services:
(Products, services) for consumers

Question 3

Household income

Answer 3

Receive income when they sell their factors of production.
(Sowing and Reaping)

(Labour) for wages.
(Capital) for interest.
(Entrepreneurship) for profit.
(Land) for rent.

Question 4

Consumers have

Answer 4

Household expenditure

= money they spent to buy goods and service.

Question 5

Producers have(Firms)

Answer 5

Costs of production

= they buy factors factor of production.

Question 6

Leakages and Injections

Answer 6

Leakages: Injections:
Saving. Investment.
taxes. Government spending
Import spending Export spending