2. The circular-flow model The following diagram presents a oroaan now model of·

Question

2. The circular-flow model The following diagram presents a oroaan now model of·simpie 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 resource markets. Suppose Hilary earns $650 per week working as a programmer for PC Pros. She uses $10 to order a mojito cocktail at Little Havana. Little Havana pays Edison $225 per week to wait tables. Edison uses $250 to purchase software from PC Pros. Identify whether each of the following events in this scenario occurs in the resource market or the product market. Resource Market Product Market Event Hilary spends $10 to order a mojito cocktail. Edison earns $225 per week working for Little Havana. Edison spends $250 to purchase software from PC Pros

Explanation / Answer

Households earn income when Firms purchase Households in resource markets

Hilary spends $10 to order a mojito cocktail- Product market

Edison earns $225 per week - Resource market

Edison spends $250 - Product market

Flow from firm to household

Option 1 and 4 represents flow from Firm to household

Related Questions

Navigate

• Browse (All)
• Browse 2
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.