1. The economy's Income and expendilture 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 Inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Markels for Goods and Services Firms Households Markets for Factors of Production Based on this model, households earn income when v purchase in markets for factors of production. Suppose Susan earns $550 per week working as work as a flight attendant for Flyaway Airlines. She uses $8 to order a mojito cocktail at Little Havana. Little Havana pays Raphael $300 per week to wait tables. Raphael uses $275 to purchase air travel to Hawail from Flyaway Airlines. Identify whether each of the following events in this scenario occurs in the market for factors of production or the market for goods and services Event Market for Factors of Production Market for Goods and Services Susan eams $550 per week working for Flyaway Airlines. Raphael earns $300 per week working for Little Havana. Susan spends $8 to order a mojito cocktail. 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 O Susan's labor O The mojito Susan receives O The $300 per week Raphael earns working for Little Havana True or False: For the economy as a whole, expenditures must equal income. O True O False
1. The economy's Income and expendilture 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 Inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Markels for Goods and Services Firms Households Markets for Factors of Production Based on this model, households earn income when v purchase in markets for factors of production. Suppose Susan earns $550 per week working as work as a flight attendant for Flyaway Airlines. She uses $8 to order a mojito cocktail at Little Havana. Little Havana pays Raphael $300 per week to wait tables. Raphael uses $275 to purchase air travel to Hawail from Flyaway Airlines. Identify whether each of the following events in this scenario occurs in the market for factors of production or the market for goods and services Event Market for Factors of Production Market for Goods and Services Susan eams $550 per week working for Flyaway Airlines. Raphael earns $300 per week working for Little Havana. Susan spends $8 to order a mojito cocktail. 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 O Susan's labor O The mojito Susan receives O The $300 per week Raphael earns working for Little Havana True or False: For the economy as a whole, expenditures must equal income. O True O False
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:1. The economy's Income and expendilture
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
Inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs.
Markels for
Goods and Services
Firms
Households
Markets for
Factors of Production
Based on this model, households earn income when
v purchase
in markets for factors of production.
Suppose Susan earns $550 per week working as work as a flight attendant for Flyaway Airlines. She uses $8 to order a mojito cocktail at Little
Havana. Little Havana pays Raphael $300 per week to wait tables. Raphael uses $275 to purchase air travel to Hawail from Flyaway Airlines.
Transcribed Image Text:Identify whether each of the following events in this scenario occurs in the market for factors of production or the market for goods and services
Event
Market for Factors of Production
Market for Goods and Services
Susan eams $550 per week working for Flyaway Airlines.
Raphael earns $300 per week working for Little Havana.
Susan spends $8 to order a mojito cocktail.
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
O Susan's labor
O The mojito Susan receives
O The $300 per week Raphael earns working for Little Havana
True or False: For the economy as a whole, expenditures must equal income.
O True
O False
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