ACTIVITY 7: SHOW THAT YOU UNOERSTAND THE TERMS 7.1. Completo the following sentences. a) An \( \qquad \) is any place whers consumers and producers try to do solve the economic problem. b) The economic problem is where people have unlimited needs and wants but \( \qquad \) resources to satisfy them. c) the factors of production are owned by \( \qquad \) \( - \) d) Capital, labour, natural resources and entrepreneurship are sold on the \( \qquad \) market. e) businesses sell their products on the \( \qquad \) - f) there are three partidpants in the circular flow of a closed economy are \( \qquad \) - \( \qquad \) and \( \qquad \) . g) when there is no trading with foreign countries, wo call it a \( \qquad \) economy. \( \qquad \) flows and h) the two flows to the circular flom model are \( \qquad \) flows. 7.2. Oraw a circular fow diagram showing the flow of factors of production and goods and services between householde, businessos and the govemment.

Let's complete the sentences in Activity 7.1 step by step: 7.1. Complete the following sentences. a) An **economic market** is any place where consumers and producers try to solve the economic problem. b) The economic problem is where people have unlimited needs and wants but **limited** resources to satisfy them. c) The factors of production are owned by **households**. d) Capital, labour, natural resources, and entrepreneurship are sold on the **factor** market. e) Businesses sell their products on the **goods and services** market. f) The three participants in the circular flow of a closed economy are **households** - **businesses** and **government**. g) When there is no trading with foreign countries, we call it a **closed** economy. h) The two flows in the circular flow model are **real** flows and **monetary** flows. --- 7.2. To draw a circular flow diagram showing the flow of factors of production and goods and services between households, businesses, and the government, we can describe the components: 1. **Households** provide factors of production (labor, land, capital) to **Businesses**. 2. **Businesses** produce goods and services and sell them to **Households**. 3. **Households** pay **Businesses** for goods and services, creating a monetary flow. 4. **Government** collects taxes from **Households** and **Businesses** and provides public goods and services. 5. **Government** also provides welfare and subsidies to **Households** and **Businesses**. The diagram would typically be a circular flow with arrows indicating the direction of the flows between these three entities. If you need a visual representation, please let me know, and I can assist with that!