Question

Suppose Kyoko earns $750 per week working as a corporate attorney for Rowan and Martin Associates. She uses $10 to order a mojito cocktail at Little Havana. Little Havana pays Jacques $450 per week to wait tables. Jacques uses $375 to purchase legal service from Rowan and Martin Associates 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 Event Jacques spends $375 to purchase legal service from Rowan and Martin Associates Kyoko earns $750 per week working for Rowan and Martin Associates. Jacques earns $450 per week working for Little Havana 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 The mojito Kyoko receives The $450 per week Jacques earns working for Little Havana The $375 Jacques spends to purchase legal service from Rowan and Martin Associates True or False: For the economy as a whole, expenditures must equal income. O True O False

Answer 1

Jacques spends $375......- market for goods and services

Kyoko earns...... - Market for factors of production

Jacques earns $450....- market for Factors of production

- the mojiyo Kyoko receives ; and

The $450 per week Jacques earns working for little Havana

- true

At equilibrium, Y= AE

Which means income is equal to aggregate expenditure