A4economy income and expenditure Goods and ServicesFirmsHouseholdsMarkets forFactors of Productionpurchase labor and capitalin markets for factors of production.Based on this model, households earn Income whenfirmsSuppose Yvette earns $625 per week working as a programmer for PC Pros. She uses $8 to order a mojito cocktall at Little Havana. Uttle Havana paysSean $250 per week to wait tables. Sean uses $225 to purchase software from PC Pros.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 ProductionMarket for Goods and ServicesEventSean earns $250 per week working for Little Havana.Sean spends $225 to purchase software from PC Pros.Yvette earns $625 per week working for PC Pros.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 thatapply.O The mojito Yvette receivesO The $225 Sean spends to purchase software from PC ProsO The $250 per week Sean earns working for Little HavanaTrue or False: The actual economy is more complicated than the simple one illustrated in this circular-flow diagram.O TrueFalse

Household is the supplier of factor of production, i.e., labor and capital Firm is the buyer of…

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Economics

Firms Households Markets for Factors of Production

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A4 economy income and expenditure

Goods and Services
Firms
Households
Markets for
Factors of Production
purchase labor and capital
in markets for factors of production.
Based on this model, households earn Income when
firms
Suppose Yvette earns $625 per week working as a programmer for PC Pros. She uses $8 to order a mojito cocktall at Little Havana. Uttle Havana pays
Sean $250 per week to wait tables. Sean uses $225 to purchase software from PC Pros.
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
Sean earns $250 per week working for Little Havana.
Sean spends $225 to purchase software from PC Pros.
Yvette earns $625 per week working for PC Pros.
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.
O The mojito Yvette receives
O The $225 Sean spends to purchase software from PC Pros
O The $250 per week Sean earns working for Little Havana
True or False: The actual economy is more complicated than the simple one illustrated in this circular-flow diagram.
O True
False

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