Which of the following is a function of households in the market economy?

• A. Regulating market prices
• B. Producing goods and services for sale
• C. Supplying factors of production to firms
• D. Setting government fiscal policy

Answer: (C)

Verified step by step guidance

1. Understand the role of households in a market economy: Households primarily act as consumers and suppliers of factors of production (such as labor, land, and capital).
2. Identify the options given and analyze each: 'Regulating market prices' is typically a function of market forces or government, not households directly.
3. 'Producing goods and services for sale' is generally the role of firms, not households.
4. 'Supplying factors of production to firms' aligns with the economic role of households, as they provide labor, capital, and other inputs that firms use to produce goods and services.
5. 'Setting government fiscal policy' is a government function, not a household function.