2. The circular-flow model 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. Firms Markets for Goods and Services Based on this model, households earn income when Event Markets for Factors of Production Households Suppose Deborah earns $650 per week working as an interior designer for Ourhouse. She uses $9 to go climbing at Wally's Climbing Wall. Wally's Climbing Wall pays Carlos $350 per week to work as a safety instructor. Carlos uses $250 to purchase furniture from Ourhouse. Deborah's labor purchase Identify whether each of the following events in this scenario occurs in the factor market or the product market. Factor Market Product Market Carlos spends $250 to purchase furniture from Ourhouse. Carlos earns $350 per week working for Wally's Climbing Wall. Deborah earns $650 per week working for Ourhouse. in factor markets. 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 climbing session Deborah receives The $250 Carlos spends to purchase furniture from Ourhouse The $350 per week Carlos earns working for Wally's Climbing Wall
2. The circular-flow model 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. Firms Markets for Goods and Services Based on this model, households earn income when Event Markets for Factors of Production Households Suppose Deborah earns $650 per week working as an interior designer for Ourhouse. She uses $9 to go climbing at Wally's Climbing Wall. Wally's Climbing Wall pays Carlos $350 per week to work as a safety instructor. Carlos uses $250 to purchase furniture from Ourhouse. Deborah's labor purchase Identify whether each of the following events in this scenario occurs in the factor market or the product market. Factor Market Product Market Carlos spends $250 to purchase furniture from Ourhouse. Carlos earns $350 per week working for Wally's Climbing Wall. Deborah earns $650 per week working for Ourhouse. in factor markets. 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 climbing session Deborah receives The $250 Carlos spends to purchase furniture from Ourhouse The $350 per week Carlos earns working for Wally's Climbing Wall
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:2. The circular-flow model
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.
Firms
Markets for
Goods and Services
Markets for
Factors of Production
Based on this model, households earn income when
Households
Deborah's labor
purchase
Suppose Deborah earns $650 per week working as an interior designer for Ourhouse. She uses $9 to go climbing at Wally's Climbing Wall. Wally's
Climbing Wall pays Carlos $350 per week to work as a safety instructor. Carlos uses $250 to purchase furniture from Ourhouse.
Event
Carlos spends $250 to purchase furniture from Ourhouse.
Carlos earns $350 per week working for Wally's Climbing Wall.
Deborah earns $650 per week working for Ourhouse.
Identify whether each of the following events in this scenario occurs in the factor market or the product market.
in factor markets.
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 climbing session Deborah receives
The $250 Carlos spends to purchase furniture from Ourhouse
The $350 per week Carlos earns working for Wally's Climbing Wall
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