Principles of Microeconomics
7th Edition
ISBN: 9781305156050
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 2, Problem 1PA
To determine
Circular-flow diagram.
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Draw a circular-flow diagram. Identify the partsof the model that correspond to the flow of goodsand services and the flow of dollars for each of thefollowing activities.a. Selena pays a storekeeper $1 for a quart of milk.b. Stuart earns $8 per hour working at a fast-foodrestaurant.c. Shanna spends $40 to get a haircut.d. Salma earns $20,000 from her 10 percentownership of Acme Industrial.
1. Draw a circular flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the follow of money for each of the following activities. Alain pays a storekeeper P100 for a liter of milk. John earns P90 per hour working at a fast-food restaurant Hanna spends P120 to get a haircut Anton earns P100,000 from his retailing business.
Tyson and Ella work at the Ruby Red Movie Theater in town. After work, they decide to watch a movie. After purchasing their tickets, they stop by the concession stand and purchase popcorn, drinks, and candy. Use the circular flow diagram to describe the purchases that Tyson and Ella made and the services and goods that were provided to them.
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Principles of Microeconomics
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- Discuss the circular flow diagram based on your own understanding and give an example where you participated in each market as member of a household.arrow_forwardASAPPP! I need the 2 nd questionarrow_forwardDraw a circular flow diagram. Determine the parts of the model that correspond to theflow of goods and services and the flow of dollars for each of the following activities.i. Ms. Goh earns RM3, 000 rental income from her 10 percent ownership of landproperty.arrow_forward
- Imagine that you just paid $50 for a new pair of jeans. According to the circular flow diagram, what decisions were made concerning the jeans you purchased, and who made decisions about the jeans you bought?arrow_forwardChapter 2 presents a Circular Flow Model. The model in Figure 2.2 is missing something. Search the Internet, find another model that includes the missing component(s), attach it to this assignment (in a DOC, PDF, or picture format), and tell me what is missing. Add the missing sector to Fig 2.2.arrow_forwardAccording to a simple circular-flow diagram, how many markets do households and firms interact in? A. four types of markets B. one type of market C. two types of markets D. three types of marketsarrow_forward
- i. Draw a circular-flow diagram and Identify the parts of the model that correspondto the flow of goods and services and the flow of dollars when Paul purchases a pair of shoes for $30. ii. Draw a circular-flow diagram and dentify the parts of the model that correspondto the flow of goods and services and the flow of dollars whenShannon receives a salary of $1,500 per week at the supermarket whichshe works. iii. Draw a circular-flow diagram and dentify the parts of the model that correspondto the flow of goods and services and the flow of dollars when Honda Limited receives $20,000 for the sale of a sports utility vehicle. iv. Draw a circular-flow diagram and dentify the parts of the model that correspondto the flow of goods and services and the flow of dollars whenMark earns $2,000 from his 15 percent ownership of Apple stock. B.Classify The following statements as positive or normative. Explain. I.Higher tax rates discourage savings and working.arrow_forwardThe economy of Sydaveria has developed, and the inhabitants use money in the form of shells. Draw a circular flow diagram showing households, firms, factors and markets. Firms produce fish and potatoes. Households provide land and labor to firms. Describe how the impact of each of the following events would spread around the circle. A devasting hurricane floods many of the potato fields. A very productive fishing season leads to a large increase in fish caught. The inhabitants of Sydaveria discover High School Musical and spend several months at festivals dedicated to singing and dancing to the soundtrack.arrow_forwardI don’t understand where the flow is supposed to begin? If it’s circular technically it doesn’t have a beginning right? Can you explain this I find this question super confusing. arrow_forward
- highlighted questionarrow_forwardIn the simple circular-flow diagram, a. households own the factors of production. b. households buy all the goods and services that firms produce. c. land, labor, and capital flow from households to firms. d. All of the above are correct.arrow_forwardB. Describe a way that your family interacts in the factor market and a way that it interacts in the product market.arrow_forward
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