1. With business examples
The Circular Flow
With business examples

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

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

4. 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

5. 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