Consider the simple circular flow diagram. The amount of consumer expenditures on goods and services from the households to the output market is $500. The cost of the resource of labor is $400. How is this possible if total income is equal to total spending in a simple circular flow diagram?

Consider the simple circular flow diagram. The amount of consumer expenditures on goods and services from the households to the output market is $500. The cost of the resource of labor is $400. How is this possible if total income is equal to total spending in a simple circular flow diagram?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Which of the following is considered a factor of production? A) Money B) Labor C) Stocks and bonds…

A: Factors of production are the resources used to create goods and services known as the production…

Q: Calculate total profits in this hypothetical economy: Units of capital: 100 Units of labor: 200 W:…

A: Ans. Total profit is the difference between total revenue and total cost. Total profit = Total…

Q: Which of the following is considered a factor of production? A) Money B) Labor C) Stocks and bonds…

A: Factors of production are the resources that are used in the production process to create goods and…

Q: What effect would this shift of aggregate supply have on the price level and the level of real…

A: Market equilibrium: At the market equilibrium we have demand equals to supply. Or at market…

Q: Suppose Lucia earns $600 per week working as a software engineer for Casement. She uses $8 to have a…

A: Factor market allows businesses to sell their resources to produce goods and services. Here the…

Q: torney for Rowan and Martin Associates. She uses $9 to order a Sam uses $200 to purchase legal…

A: In a 2-sector model, firms earn revenue when Households buy Goods and Services in product market,…

Q: The following diagram presents a circular-flow model of a simple economy. The outer set of arrows…

A: Households earn income when firms purchase factor services in factor market.Explanation:Approach to…

Q: This table provides some information about hourly output and revenue for a firm in a competitive…

A: Marginal revenue measures the change in total revenue due to a change in quantity. Marginal product…

Q: The top graph below shows David’s preferences for leisure and consumption. In the bottom graph,…

A: A labor supply curve is the locus of all points representing the various number of hours of labor…

Q: 2. The circular-flow model The following diagram presents a circular-flow model of a simple economy.…

A: Circular flow model shows how income flows in different sectors between households and firms

Q: Describe the Relationships between the elements in the figure below. Expenditures on Goods and…

A: An economy consists of multiple sectors : households, firms , government & rest of the world.…

Q: Suppose Amy earns $575 per week working as an interior designer for Ourhouse. She uses $10 to take a…

A: When talking about the connection between firms and households, it can be seen in two kinds of…

Q: Needing some help with this.. thank you so much!

A: Firms in the labor market represent the demand (dd) side of the labor services and households…

Q: Markets for Goods and Services Households Firms Markets for Factors of Production in markets for…

A: Firm, labor

Q: termine where each example goes in the circular flow diagram. More than one example may go into a…

A: A circular flow diagram is a visual representation of the flow of goods, services, and money within…

Q: Which allocation point in the short-run production possibilities frontier (PPF) will lead to the…

A: The answer is given below

Q: The following diagram presents a circular-flow model of a simple economy. The outer set of arrows…

A: Households earn income when "firms" purchase their "factors of production : land, labor, capital…

Q: Suppose a grocery store's sales are 200,000 TL in one year. During this same time period, the firm…

A: Accounting profits are the revenue that exceeds the explicit costs in the production. Accounting…

Q: possible? What is the cost of producin

A: Production function (Silk sleeves ) : S = Ls1/3 F2/3Silk fabric price = 20 Ls price = 10 per hour…

Q: Alyssa spends all of her money on comic books and mandarins. In 2014, she earned $27.00 per hour,…

A: The real value is the value of economic variable that is calculated in terms of any other variable.

Q: Suppose that Maria is starting a food ordering and delivery company. Customers order meals online.…

A: Production functions shows the relationship between inputs and outputs. Production functions shows…

Q: The table below shows the price of inputs and the price of outputs at each step in the production…

A: Expenditure method

Q: 1. The link between resource and product markets The following graph represents the labor market in…

A: The demand curve for labour, under the ceteris paribus assumption, shows the amount of labor…

Q: 1. Suppose Worker A and Worker B produce knives and forks. Worker A has to work for 2 hours to…

A: The following problem has been solved as follows:

Q: Question 12 Which of the following occurs in the factor market? Nathan spends $500 to buy a TV from…

A: Factors of production: - The inputs that are used to produce goods and services are known as the…

Q: The marginal product of labor in the production of computer chips is 50 chips per hour. The marginal…

A: Marginal product of input is the additional output produced by employing an additional unit of the…

Q: Which of the following statements is most accurate about goods and services? They are purchased by…

A: Circular flow diagram refers to the model that shows how money of dollar flows between households…

Q: Consider the following production function for an economy; Y=K^2+2K+L. Calculate the Marginal…

A: Given, The Production Function of the economy is given as : Y=K^2+2K+L Marginal Product of an input…

Q: 1. Consider this simplified sequence: A farmer starts with a unit of wheat and sells it to a miller…

A: GDP is the sum total of the market value of final goods and services produced in a country during a…

Q: Households Type your answer here 9 factors of production in resource markets. Households Please type…

A: Households ______________ factors of production in resource markets. Households __________ final…

Q: None

A: Step 1: IntroductionIn this scenario, the factor market and the product market can be identified as…

Q: Identify whether each of the following events in this scenario occurs in the market for factors of…

A: 1). - Market for factors of Production is where the means of production or resources to make goods…

Q: In the markets for factors of production, the government provides firms with inputs for the…

A: Capital is created by the workers of labor on land and entrepreneur is only a special type of labor…

Q: Q#1. Last year, M.Hamed left a job that pays 36,000 OMR to run his own bike-repair shop. M. Hamed’s…

A: Given: M.Hamed left a job that pays = 36,000 OMR M. Hamed’s shop charges = 5 OMR for a repair Total…

Q: Louise's individual labour supply curve is upward sloping, which of the following is consistent with…

A: Labor supply shows different combinations of wage and number of hours supplied.

Q: This exercise applies the basic Ricardian model of one factor and two goods. The table below…

A: International economic concepts deal with the manner in which countries interact with each other.…

Q: Which two arrows in the diagram depict the following transaction: Stanley purchases the novel,…

A: Here we have to find the arrows that represent the transaction from firm to household.Circular Flow:…

Q: FIGURE 2-13 Product Markets Households Firms Factor Markets Refer to Figure 2-13. Which of the…

A: The circular flow of income model depicts how income flows between economic entities in an economy.

Q: Consider the following production function…

A: a)To maximize the value of TP: So as to maximize the value of TP, MP has to be zero, which gives:

Q: 1. Suppose Worker A and Worker B produce knives and forks. Worker A has to work for 2 hours to…

A: We are going to calculate the Opportunity costs to answer these questions with explanation.

Q: whats the difference between marginal physical product (MPP) and the marginal rate of subsitution…

A: Marginal physical product is focused on production theory and marginal rate of substitution is…

Question

Consider the simple circular flow diagram. The amount of consumer expenditures on goods and services
from the households to the output market is $500. The cost of the resource of labor is $400. How is this
possible if total income is equal to total spending in a simple circular flow diagram?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Definition

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Q = K x L (Quantity = capital X labor) Are MPk and MPL diminishing? Is MRTSL,k diminishing? (Marginal rate of technical substitution)
Firms Markets for Goods and Services Markets for Factors of Production Based on this model, households earn income when Households purchase Suppose Neha earns $675 per week working as a programmer for Maction. She uses $8 to have dessert at Guilherme's Garden. Guilherme's Garden pays Lorenzo $500 per week to curate a wine list. Lorenzo uses $150 to purchase software from Maction. Event Neha spends $8 to have dessert. Lorenzo spends $150 to purchase software from Maction. Neha earns $675 per week working for Maction. 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. Market for Factors of Production Market for Goods and Services in markets for factors of production. 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 $150 Lorenzo spends to purchase software from Maction The $500 per…
What is the difference between a negatively and positively sloped income-consumption curve?
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. O The $225 Raphael spends to purchase tax services from A-Plus Accountants Susan's labor The $250 per week Raphael earns working for Dinah's Diner The breakfast Susan receives
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. Firms Markets for Goods and Services Markets for Factors of Production Based on this model, firms earn revenue when Households purchase in markets for goods and services. Suppose Alyssa earns $850 per week working as an installation technician for Stephon's Satellite Service. She uses $8 to buy shampoo at Christian's Corner Store, Christian's Corner Store pays Tim $525 per week to stock shelves. Tim uses $350 to purchase satellite tv from Stephon's Satellite Service.
Firms Markets for Goods and Services Markets for Factors of Production Based on this model, households earn income when Event Households purchase Suppose Maria earns $525 per week working as a programmer for PC Pros. She uses $10 to get her car washed at Spotless Car Wash. Spotless Car Wash pays Kevin $300 per week to wash cars. Kevin uses $175 to purchase software from PC Pros. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Kevin spends $175 to purchase software from PC Pros. Maria earns $525 per week working for PC Pros. Kevin earns $300 per week working for Spotless Car Wash. Factor Market in factor markets. Product Market O
Explain how households and firms interact in the factor market and in the product market
5
Shelley runs a worm farm in Lakewood, Washington. The table shows part of Shelley's total product schedule. Construct Shelley's marginal product and average product schedules. Fill in the right columns of the table. >>> Answer in whole numbers. Labor (workers) 0 1 2 3 4 Total product (worms per week) 0 1,200 3,600 10,800 12,000 Marginal product (worms per worker) Average product (worms per worker)
Sally Statistics is implementing a system of statistical process control (SPC) charts in her factory in an effort to reduce the overall cost of scrapped product. The current cost of scrap is $X per month. If a 75% learning curve is expected in the use of the SPC charts to reduce the cost of scrap, what would the percentage reduction in monthly scrap cost be after the charts have been used for 6 months? (Hint: Model each month as a unit of production.)
Based on this model, households earn income when purchase in factor markets. Suppose Yvette earns $525 per week working as a pilot for Wingies. She uses $9 to take a yoga class at Big Bend. Big Bend pays Sean $500 per week to instruct yoga. Sean uses $300 to purchase international flights from Wingies. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Event Yvette earns $525 per week working for Wingies. Yvette spends $9 to take a yoga class. Sean spends $300 to purchase international flights from Wingies. Factor Market Product Market о O 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. Yvette's labor The $500 per week Sean earns working for Big Bend The $300 Sean spends to purchase international flights from Wingies The yoga class Yvette receives
The total product curve studied in class represents the relation between total production by a firm and the quantity variations of total inputs. O True O False