1. The economy's income and expenditure 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 arows (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 firms purchase goods and services in markets for factors of production. Suppose Rosa earns $650 per week working as an analyst for A-Plus Accountants. She uses $10 to have breakfast at Dinah's Diner. Dirah's Diner pays Nick $350 per week to work as a short-order cook. Nick uses $250 to purchase tax services from A-Plus Accountants. 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 Goods and Services Market for Factors of Production Rosa spends $10 to have breakfast, Rosa earns $650 per week working for A-Plus Accountants. Nick eams $350 per week working for Dinah's Diner. Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of doliars, inputs, or outputs. Check all that apply. O The breakfast Rosa recelves O Rosa's labor O The $250 Nick spends to purchase tax services from A-Plus Accountants True or False: Gross domestic product (GDP) measures total expenditures on final goods and services during a given period of time. O True O False
1. The economy's income and expenditure 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 arows (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 firms purchase goods and services in markets for factors of production. Suppose Rosa earns $650 per week working as an analyst for A-Plus Accountants. She uses $10 to have breakfast at Dinah's Diner. Dirah's Diner pays Nick $350 per week to work as a short-order cook. Nick uses $250 to purchase tax services from A-Plus Accountants. 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 Goods and Services Market for Factors of Production Rosa spends $10 to have breakfast, Rosa earns $650 per week working for A-Plus Accountants. Nick eams $350 per week working for Dinah's Diner. Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of doliars, inputs, or outputs. Check all that apply. O The breakfast Rosa recelves O Rosa's labor O The $250 Nick spends to purchase tax services from A-Plus Accountants True or False: Gross domestic product (GDP) measures total expenditures on final goods and services during a given period of time. O True O False
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:1. The economy's income and expenditure
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 goods and services
in markets for factors of production.
firms
Suppose Rosa earns $650 per week working as an analyst for A-Plus Accountants. She uses $10 to have breakfast at Dinah's Diner. Dirah's Diner
pays Nick $350 per week to work as a short-order cook. Nick uses $250 to purchase tax services from A-Plus Accountants.
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
Rosa spends $10 to have breakfast.
Rosa earns $650 per week working for A-Plus Accountants.
Nick eams $350 per week working for Dinah's Diner.
Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of doliars, inputs, or outputs. Check all that
apply.
O The breakfast Rosa receives
O Rosa's labor
O The $250 Nick spends to purchase tax services from A-Plus Accountants
True or False: Gross domestic product (GDP) measures total expenditures on final goods and services during a given period of time.
O True
O False
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