Question

Are households primarily buyers or sellers in the goods and services market? In the labor market?

Short answer

In the goods and services market, households are primarily buyers as they consume goods and services provided by producers. In the labor market, households are mainly sellers, as they supply labor in exchange for wages and other forms of compensation.

Step-by-step solution

Role of households in the goods and services market

In the goods and services market, households are primarily consumers who determine the demand for various goods and services. They use their income to buy goods and services from producers, such as businesses and the government. As such, they are mainly buyers in the goods and services market.

Role of households in the labor market

In the labor market, households provide labor to firms, government, and other organizations in exchange for wages, salaries, and other forms of compensation. Essentially, households are selling their labor resources to employers. Therefore, they are mainly sellers in the labor market.