Final answer:
A 'market' consists of all potential buyers and sellers of goods and services having the ability and willingness to engage in transactions. In a market economy, businesses and households interact primarily in the product and resource markets. Understanding the dynamics of a market is crucial for grasping the principles of economic transactions.
Step-by-step explanation:
Any group of people who, as individuals or as organizations, have needs for products in a product class and who have the ability, willingness, and authority to purchase such products are defined as a market. In a market economy, decision-making is decentralized, and markets consist of all potential buyers and sellers of goods and services.
The product market, for example, is where businesses sell goods and services to households, which, in return, provide revenue to the businesses.
This exchange is essential for the functioning of a market economy, where the resource market is also crucial as it is where businesses acquire the resources needed to produce goods and services. The concept of a market is fundamental to understanding how economic transactions occur and how buyers and sellers interact in an economy.
Therefore, the correct answer is b) market.