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 in factor markets. Suppose Poornima earns $500 per week working as a math tutor for A-Plus Tutoring. She uses $9 to take a spin class at Silver's Gym. Silver's Gym pays Manuel $225 per week to work as a trainer. Manuel uses $125 to purchase tutoring services from A-Plus Tutoring. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Event Poornima earns $500 per week working for A-Plus Tutoring. Manuel spends $125 to purchase tutoring services from A-Plus Tutoring. Poornima spends $9 to take a spin class. 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 spin class Poornima receives Poornima's labor The $125 Manuel spends to purchase tutoring services from A-Plus Tutoring The $225 per week Manuel earns working for Silver's Gym

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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. Based on this model, households earn income when purchase in factor markets. Suppose Poornima earns $500 per week working as a math tutor for A-Plus Tutoring. She uses $9 to take a spin class at Silver's Gym. Silver's Gym pays Manuel $225 per week to work as a trainer. Manuel uses $125 to purchase tutoring services from A-Plus Tutoring. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Event Poornima earns $500 per week working for A-Plus Tutoring. Manuel spends $125 to purchase tutoring services from A-Plus Tutoring. Poornima spends $9 to take a spin class. 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 spin class Poornima receives Poornima's labor The $125 Manuel spends to purchase tutoring services from A-Plus Tutoring The $225 per week Manuel earns working for Silver's Gym