Question

name the four basic economic entities ​

Answer 1

Answer:

In an economy, production, consumption and exchange are carried out by three basic economic units: the firm, the household, and the government.

Firms

Firms make production decisions. These include what goods to produce, how these goods are to be produced and what prices to charge. They employ the various factors of production and they sell the finished goods to the households for consumption and to the government.

Households

Households make consumption decisions and own factors of production. They provide firms with factor services in production, and buy finished goods from firms for consumption.

Government

The government collects taxes from households, buys goods from firms, and distributes those goods to households individually or collectively. It also redistributes purchasing power between households.

Explanation:

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Answer 2

Answer:

Consumers, households, firms and the government are the four basic entities of an economy because they perform the basic economic activities of production and consumption in an economy.

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