What factors incentivize households to sell their resources and what do households gain from selling their resources? What factors incentivize firms to buy resources?

posted by Alfred Igbodipe , Mar 27, 2016, 12:38 PM

The circular flow model illustrates the flows of resources and products from households to businesses and from businesses to households, along with the corresponding monetary flows. Businesses are on the buying side of the resource market and the selling side of the product market. Households are on the selling side of the resource market and the buying side of the product market.

• How critical is the assumption of resource scarcity in circular flow?
• What factors incentivize households to sell their resources and what do households gain from selling their resources?
• What factors incentivize firms to buy resources?

https://www.youtube.com/watch?v=_PKH2wtDT3E