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 purchase Suppose Kyoko earns $625 per week working as a driving instructor for Passing Left. She uses $10 to go climbing at Wally's Climbing Wall. Wally's Climbing Wall pays Jacques $325 per week to work as a safety instructor. Jacques uses $225 to purchase driving lessons from Passing Left. Event Kyoko earns $625 per week working for Passing Left. Jacques earns $325 per week working for Wally's Climbing Wall. Jacques spends $225 to purchase driving lessons from Passing Left. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Factor Market Product Market O O O in factor markets. The $325 per week Jacques earns working for Wally's Climbing Wall The climbing session Kyoko receives O O O Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply. Kyoko's labor The $225 Jacques spends to purchase driving lessons from Passing Left
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 purchase Suppose Kyoko earns $625 per week working as a driving instructor for Passing Left. She uses $10 to go climbing at Wally's Climbing Wall. Wally's Climbing Wall pays Jacques $325 per week to work as a safety instructor. Jacques uses $225 to purchase driving lessons from Passing Left. Event Kyoko earns $625 per week working for Passing Left. Jacques earns $325 per week working for Wally's Climbing Wall. Jacques spends $225 to purchase driving lessons from Passing Left. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Factor Market Product Market O O O in factor markets. The $325 per week Jacques earns working for Wally's Climbing Wall The climbing session Kyoko receives O O O Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply. Kyoko's labor The $225 Jacques spends to purchase driving lessons from Passing Left
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
The options for the sentence "Based on this model, households earn income when purchase in factor markets." are a. households b. firms (for the first blank line" and then for the second one are a. factors b. goods and services
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
Event
Households
purchase
Suppose Kyoko earns $625 per week working as a driving instructor for Passing Left. She uses $10 to go climbing at Wally's Climbing Wall. Wally's
Climbing Wall pays Jacques $325 per week to work as a safety instructor. Jacques uses $225 to purchase driving lessons from Passing Left.
Identify whether each of the following events in this scenario occurs in the factor market or the product market.
Kyoko earns $625 per week working for Passing Left.
Jacques earns $325 per week working for Wally's Climbing Wall.
Jacques spends $225 to purchase driving lessons from Passing Left.
in factor markets.
Factor Market Product Market
Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that
apply.
The $325 per week Jacques earns working for Wally's Climbing Wall
The climbing session Kyoko receives
☐ Kyoko's
O The $225 Jacques spends to purchase driving lessons from Passing Left
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