Question

What are the basic problems faced by individuals,

households, firms and society? How are these problems solved by the market mechanism?

(Word Limit: 300words)

Answer 1

Answer:

In factor markets, households and firms play different roles than they do in the markets for goods and services. ... Households provide labor, capital, and other factors of production to firms, and this is represented by the direction of the arrows on the “Labor, capital, land, etc.” lines on the diagram above.