With business examples The Circular Flow With business examples

Step one: Pick a business you know about (make it easy) Lets try Dairy Farming

Next Plan the two Markets Resource Market (factor market) Land Labor Capital Entrepreneur Product Market (goods & services market) Milk Yogurt Cheese Ice cream

Line up the resources with the appropriate factor payment Land rented from another Farmer Wages paid hourly for farm hands Tractor financed through the Farmer’s Bank After costs are covered the Farmer can make a profit

Products made from milk Why buy and which utility Line up the Products with the G&S payments and utility satisfied by them Products made from milk Why buy and which utility Healthy bones and teeth- buy milk Yogurt preserves milk—less spoilage buy yogurt Making cheese preserves milk too –buy cheese Tasty treat on a hot day at the county fair—buy ice cream cone