The following diagram presents a circular flow model of a simple economy. The ou

Question

The following diagram presents a circular flow model of a simple economy. The outer (green) set of arrows shows the flow of money, and the inner (red) set of arrows shows the corresponding flow of inputs and outputs. Based on this model, firms earn revenue when purchase in . Kim earns $700 per week working as a flight attendant for Flyaway Airlines. She users $8 to order a mojito cocktail at Little Havana. Little Havana pays Albert $480 per week to wait tables. Albert user $350 to purchase air travel to Hawali from Flyaway Airlines. Which of the events in this scenario occur in markets for goods and services? Check all that apply. Kim spends $8 to order a mojito cocktail. Albert spends $350 to purchase air travel to Hawali from Flyaway Airlines. Kim earns $700 per week working for Flyaway Airlines. Albert earns $480 per week working for Little Havana. Which of the elements of this scenario represents a flow of money, inputs, or outputs from a household to a firm? Check all that apply. The mojito Kim receives Kim's labor The $350 Albert spends to purchase air travel to Hawali from Flyaway Airlines

Explanation / Answer

Firms earn revenue when households purchase goods and services in the markets for goods and services. Which of the events in this scenario occur in markets for goods and services? A and B. Which of the elements of this scenario represent a flow of money, inputs, or outputs from a household to a firm? A, B, C, and D.

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