Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 2.2, Problem 3QQ
To determine
Circular flow in the two sector model.
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1. Draw a circular flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the follow of money for each of the following activities. Alain pays a storekeeper P100 for a liter of milk. John earns P90 per hour working at a fast-food restaurant Hanna spends P120 to get a haircut Anton earns P100,000 from his retailing business.
2. Draw a Circular-Flow diagram. Identify the parts of the model that correspond to
the flow of goods and services and the flow of money for each of the following activities.
(a) Pervin pays a shopkeeper 1 manat for a litre of milk.
(b) Nermin earns 3 manats per hour working at a fast food restraunt
(c) Azer spends 7 euros to see a film.
(d) Anar earns 10000 euros from his 10 percent ownership in a travel company.
a) Can you identify and explain your family’s interaction in the market for factors of production and your family’s interaction in the market for goods and services.
b) Economy can be represented by economic models. One of the models we use to understand economy is a “Circular Flow Diagram”. Sketch a Circular flow model and explain the flow of money and flow of goods and services and factors of production caused by the following activities.
i. Kaleem pays a shopkeeper Rs.150 for a liter of milk.
ii. Mustaqeem while working at a fast-food restaurant earns Rs.500 per hour.
iii. Sana spends Rs.500 on a haircut.
iv. Mustafa receives Rs.200,000 from his 10 percent ownership of Salman Chemicals Ltd.
Chapter 2 Solutions
Microeconomics
Ch. 2.2 - Prob. 1QQCh. 2.2 - Prob. 2QQCh. 2.2 - Prob. 3QQCh. 2.2 - Prob. 4QQCh. 2 - Prob. 1DQCh. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Prob. 5DQCh. 2 - Prob. 6DQ
Ch. 2 - Prob. 7DQCh. 2 - Prob. 8DQCh. 2 - Prob. 9DQCh. 2 - Prob. 10DQCh. 2 - Prob. 11DQCh. 2 - Prob. 12DQCh. 2 - Prob. 13DQCh. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 1PCh. 2 - Prob. 2PCh. 2 - Prob. 3PCh. 2 - Prob. 4P
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- 2. Explain the economic activities between consumers and producers using a circular flow image.arrow_forwardb) Economy can be represented by economic models. One of the models we use to understand economy is a “Circular Flow Diagram”. Sketch a Circular flow model and explain the flow of money and flow of goods and services and factors of production caused by the following activities. i. Kaleem pays a shopkeeper Rs.150 for a liter of milk. ii. Mustaqeem while working at a fast-food restaurant earns Rs.500 per hour. iii. Sana spends Rs.500 on a haircut. iv. Mustafa receives Rs.200,000 from his 10 percent ownership of Salman Chemicals Ltd.arrow_forwardIn the circular-flow diagram, firms are sellers in Select one: a. the factors of production market b. both markets C. the goods and services market. d. neither marketarrow_forward
- a. Draw a circular-flow diagram. Identify the parts of the model that correspondto the flow of goods and services and the flow of dollars for each of thefollowing activities. i. Paul purchases a pair of shoes for $30. ii. Shannon receives a salary of $1,500 per week at the supermarket whichshe works. iii. Honda Limited receives $20,000 for the sale of a sports utility vehicle. iv. Mark earns $2,000 from his 15 percent ownership of Apple stock.arrow_forwardTyson and Ella work at the Ruby Red Movie Theater in town. After work, they decide to watch a movie. After purchasing their tickets, they stop by the concession stand and purchase popcorn, drinks, and candy. Use the circular flow diagram to describe the purchases that Tyson and Ella made and the services and goods that were provided to them.arrow_forwardMain Content Firms B D arrow A arrow B arrow C Markets for Goods and Services arrow D Markets for Factors of Production Refer to the figure. You spend $2 to buy a cup of coffee. Which arrow shows the flow of $2? B Households Darrow_forward
- In the circular-flow diagram households receive money for ______ in the ______ market?arrow_forwardHouseholds play a role in the circular flow of goods by: A. providing natural resources to businesses.B. designing and producing new goods.C. selling goods that companies produce.D. purchasing goods at product markets.arrow_forwardO. point B. point E. point C. point A.arrow_forward
- Give typing answer with explanation and conclusion Which of the following illustrates goods markets? A. Maggie took an educational loan of $10,000. Safeway sells milk at $4.35 a gallon. B. Anna got a job with a public firm. Smith wants to take a vacation in December. C. Walmart sells potatoes at $2.14 a pound. Ann bought a new condo for $200,000. D. Banks have raised interest rates to 2.5 percent. Ryan enjoys playing chess.arrow_forwardWhich of the following is true in the markets for factors of production in the circular-flow diagram, a. households provide firms with labor, land, and capital. b. households provide firms with savings for investment. c. firms provide households with goods and services. d. firms provide households with revenue.arrow_forward5.) In the flow of funds model, households make cash payments in the cash payments in the market and receive market. a.) product, product b.) product, factor c.) factor, factor d.) factor, product 6.) Which of the following statements is positive? a.) Patent length should increase to encourage the development of new pharmaceutical drugs b.) TCNJ should lower its tuition c.) A higher minimum wage would cause unemployment d.) None of the abovearrow_forward
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