In the context of microeconomics, are households primarily buyers or sellers in the goods and services market, and in the labor market?

• A. Households are sellers in both the goods and services market and the labor market.
• B. Households are buyers in both the goods and services market and the labor market.
• C. Households are sellers in the goods and services market and buyers in the labor market.
• D. Households are buyers in the goods and services market and sellers in the labor market.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the two main markets in microeconomics: the goods and services market, and the labor market.
2. Step 2: In the goods and services market, households purchase goods and services to satisfy their needs and wants, so they act as buyers.
3. Step 3: In the labor market, households offer their labor to firms in exchange for wages, so they act as sellers of labor.
4. Step 4: Firms, on the other hand, are sellers in the goods and services market (they supply products) and buyers in the labor market (they demand labor).
5. Step 5: Therefore, households are buyers in the goods and services market and sellers in the labor market.