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 fow of inputs and outputs. Markets for Goods and Services Firms Hounahokds Markets for Factors of Production Based on this model, households earn income when purchase in markets for factors of production. Suppose Sharon earns s600 per week working as a doctor for the Medical Clinic. She uses $9 to get her car washed at Spotless Car Wash. Spotless Car Wash pays Paolo $325 per week to wash cars. Paolo uses $100 to purchase medical services from the Medical Clinic. identily 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 Event Paolo spends $100 to purchase medical services from the Medical Clinic. Sharon spends $9 to get her car washed. Paolo earns $325 per week working for Spotless Car Wash. 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 $325 per week Paolo eams working for Spotless Car Wash O Sharon's labor O The car wash Sharon recelves True or False: For the economy as a whole, expenditures must equal income. O True O False
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 fow of inputs and outputs. Markets for Goods and Services Firms Hounahokds Markets for Factors of Production Based on this model, households earn income when purchase in markets for factors of production. Suppose Sharon earns s600 per week working as a doctor for the Medical Clinic. She uses $9 to get her car washed at Spotless Car Wash. Spotless Car Wash pays Paolo $325 per week to wash cars. Paolo uses $100 to purchase medical services from the Medical Clinic. identily 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 Event Paolo spends $100 to purchase medical services from the Medical Clinic. Sharon spends $9 to get her car washed. Paolo earns $325 per week working for Spotless Car Wash. 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 $325 per week Paolo eams working for Spotless Car Wash O Sharon's labor O The car wash Sharon recelves True or False: For the economy as a whole, expenditures must equal income. O True O False
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
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 fow 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
in markets for factors of production.
Suppose Sharon earns $600 per week working as a doctor for the Medical Clinic. She uses $9 to get her car washed at Spotless Car Wash. Spotless
Car Wash pays Paolo $325 per week to wash cars. Paolo uses $100 to purchase medical services from the Medical Clinic.
Identily 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
Market for Goods and
Event
Production
Services
Paolo spends $100 to purchase medical services from the Medical
Clinic.
Sharon spends $9 to get her car washed.
Paolo earns $325 per week working for Spotless Car Wash.
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 $325 per week Paolo earms working for Spotless Car Wash
O Sharon's labor
O The car wash Sharon receives
True or False: For the economy as a whole, expenditures must equal income.
O True
O False
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!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
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.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education