Question

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 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 purchase in markets for factors of production. Suppose Crystal earns $625 per week working as an analyst for A-Plus Accountants. She uses $9 to have breakfast at Dinah's Diner. Dinah's Diner pays Brian $375 per week to work as a short-order cook. Brian uses $325 to purchase tax services from A-Plus Accountants. 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. Event Brian earns $375 per week working for Dinah's Diner. Crystal earns $625 per week working for A-Plus Accountants. Crystal spends $9 to have breakfast. Mar Factors of Production Mar 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 $375 per week Brian earns working for Dinah's Diner The breakfast Crystal receives O Crystal's labor True or False: The actual economy is more complicated than the simple one illustrated in this circular-flow diagram. O True O False