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.
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The $425 per week Andrew earns working for Spotless Car Wash
The car wash Beth receives Explanation: The scenario is:A firm produces a good and sells it to a household.-The firm produces a good-The firm sells the good to a household
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Identify whether each of the following events in this scenario occurs in the resource market or the product market.
Andrew earns $425 per week working for Spotless Car Wash.
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Resource Market Explanation: The first event occurs in the product market because it is the market for labor services. The second event occurs in the resource market because it is the market for money.
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Identify whether each of the following events in this scenario occurs in the resource market or the product market.
Beth earns $675 per week working for PC Pros.
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Resource Market Explanation: The first event that occurs is that Beth earns $675 per week. This event occurs in the resource market. The second event that occurs is that Beth spends $100 on a new computer. This event occurs in the product market.
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Identify whether each of the following events in this scenario occurs in the resource market or the product market.
Beth spends $9 to get her car washed.
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Product Market Explanation: The event of Beth spending $9 to get her car washed occurs in the product market.
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Based on this model, households earn income when _________ purchase ____________.
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Firms
Resources Explanation: This model suggests that when households produce a good or service that is then purchased by another household or firm, the producing household earns income. In other words, income is generated through the exchange of goods and services in the marketplace.
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An economic model is
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a simplified representation of some aspect of the economy. Explanation: An economic model is a simplified representation of a real-world economy. It is used to analyze and predict how economic variables will interact with each other.
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The circular-flow diagram illustrates that, in markets for the factors of production,
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Households are sellers, firms are buyers Explanation: households own the factors and rent them to firms.The circular-flow diagram is a graphical representation of how the different actors in an economy interact with each other. The diagram shows that households own the factors of production, such as land and labor, and rent them to firms. The firms then use these factors to produce goods and services, which are sold to households. The households then use the income they earn from selling goods and services to purchase the factors of production from the firms.
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