Question

James works at an automobile factory. Every day he goes to work and inspects the machines at the factory to make sure they are running smoothly. At the end of the every week, James is paid by his boss, Bill, for his good work. James takes his paycheck to the bank every Friday and deposits most of it, but keeps a little bit of spending money. He then takes his wife, Julie, out for dinner, using the leftover money from his paycheck. According to the circular flow of economics, which market is James participating in with his boss, Bill?

a. Stamp Marketb. Factor Marketc. Product Marketd. Automobile Market

Answer 1

The correct answer is c. Product Market.

Step-by-step explanation:

The product market encompasses any mechanism through which the exchange of a good or service takes place in exchange for money - prices between a buyer and a seller.

That is, it includes a large number of physical places (such as markets, stores, shopping centers or vending machines) but also means that do not require the presence of both parties (sale by catalog or internet).