Based on this model, households earn income when (Households/Firms) purchase (fa
ID: 1131617 • Letter: B
Question
Based on this model, households earn income when (Households/Firms) purchase (factors/goods and services) in factor markets.
Suppose Kate earns $775 per week working as work as a flight attendant for Flyaway Airlines. She uses $10 to have breakfast at Dinah's Diner. Dinah's Diner pays Hubert $450 per week to work as a short-order cook. Hubert uses $325 to purchase air travel to Hawaii from Flyaway Airlines.
Identify whether each of the following events in this scenario occurs in the factor market or the product market.
1. Kate spends $10 to have breakfast. (Factor Market/Product Market)
2. Kate earns $775 per week working for Flyaway Airlines. (Factor Market/Product Market)
3. Hubert earns $450 per week working for Dinah's Diner (Factor Market/Product Market)
Which of the elements of this scenario represent a flow from a firm to a household? This could be a flow of dollars, inputs, or outputs. Check all that apply.
( )The breakfast Kate receives
( )The $325 Hubert spends to purchase air travel to Hawaii from Flyaway Airlines
( )Kate's labor
( )The $450 per week Hubert earns working for Dinah's Diner
The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Markets for Goods and Services Firms Households Markets for Factors of Production Based on this model, households earn income when purchase in factor markets.Explanation / Answer
Based on this model, households earn income when FIRMS purchase FACTORS in factor markets.
1) Product Market.
2) Factor Market.
3) Factor Market.
The elements represent a flow from a firm to a household are as.
a) The breakfast Kate recieves .
d) The $450 per week Huberts earns working for Dinah's Diner.
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