Question

Attempts Average: 3 1. The circular-flow model 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 flow of inputs and outputs. Markets for Goods and Services Firms Households Markets for Factors of Production Based on this model, households earn income when firms purchase factors in factor markets. Suppose Kyoko carns $725 per week working as a programmer for PC Pros. She uses $10 to have breakfast at Dinah's Diner. Dinah's Diner pays Jacques $450 per week to work as a short-order cook. Jacques uses $375 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 Event Factor Market Product Market Jacques spends $375 to purchase software from PC Pros.

Answer 1

Answer

!) households earn income when Firms purchase in factor market

2)

EVENT A =Product market

EVENT B =Product market

AS in both events purchase is happening by households or individuals from firms or producers

EVENT C = Factor market

3) The $450 per week Jacques earns working for Dinnah's Dinner