Question

5. The circular flow model Aa Aa The following diagram presents a circular flow model of a simple economy. The outer (green) set of arrows shows t flow of money, and the inner (red) set of arrows shows the corresponding flow of inputs and outputs Consumption Spending Product Markets Revenue (Households Buy, Firms Sell) Goods and Services Purchased Goods and Services Sold Households Firms Capital, Land, Labour and Entrepreneurship Inputs for Production Factor Markets (Households Sell, Firms Buy) Wages, Rent Interest, and Profit Money Income Based on this model, households earn income wher firms purchase goods and services in product markets factor markets Read the following scenario and answer the questions that follow Bette earns $300 per week working as a short-order cook for Dinah's Diner She uses $300 to draw up a will at Jean and Blanchette Associates. Jean and Blanchette Associates pays Patrick $800 per week to work as a corporate attorney. Patrick uses $10 to purchase breakfast from Dinah's Diner Which of the events in this scenario occur in product markets? Check all that apply Patrick earns $800 per week working for Jean and Blanchette Associates Patrick spends $10 to purchase breakfast from Dinah's Diner Bette spends $300 to draw up a will Bette earns $300 per week working for Dinah's Diner Which of the elements in this scenario represent a flow from a household to a firm? This could be a flow of money, inputs, or outputs. Check all that apply The legal service Bette receives The $10 Patrick spends to purchase breakfast from Dinah's Diner The $800 per week Patrick earns working for Jean and Blanchette Associates Bette's labour

Answer 1