Final answer:
Households obtain wages, rents, interest, and profits from the resource market in exchange for their labor and other resources according to the circular flow model.
Step-by-step explanation:
Based on the circular flow model, households receive wages, rents, interest, and profits from the resource market. This income is in exchange for providing labor and other resources such as land, capital, and raw materials to firms.
Firms utilize these resources to produce goods and services, which they then sell to households in the product market. The money paid to households in the form of wages and other payments is then used by these households to purchase the goods and services, thus completing the circular flow. This model demonstrates the continuous movement of money, resources, and goods and services between firms and households in an economy.
Based on the circular flow model, households obtain income from the resource market by providing factors of production (land, labor, and capital) to firms. In return, firms pay households wages for labor, rent for land, interest for capital, and profits for entrepreneurship.
For example, a household may provide labor to a firm and receive wages as income. Another household may rent out their land to a firm and receive rent as income. Similarly, households with capital investments receive interest as income. Additionally, households that engage in entrepreneurship receive profits as income.