Consider the simple circular flow diagram. The amount of consumer expenditures on goods and services from the households to the output market is $500. The cost of the resource of labor is $400. How is this possible if total income is equal to total spending in a simple circular flow diagram?
Q: student has a monthly budget of $150 to spend on either coke, which cost $5 each, or biryani, which…
A: Budget constraint represents all the combinations of goods and services a consumer can consume with…
Q: Which of the following statements is FALSE? O The value of total income is equal in value to total…
A: Answer : Total income is always greater than total output
Q: Roberto is a senior citizen who consumes food and health care. When he retired in 2002, he consumed…
A: Meaning of Cost of Living Index: The cost of living index refers to the modification in costs of…
Q: Suppose the information in the following table is for a simple economy that produces only the…
A: When base year is given, real GDP is a specfiic year is calculated by GDP deflator and nominal GDP…
Q: W Y. L K M N. Refer to Figure 23-1. Which of the following pairs correctly identify W and Y? a.…
A: The circular flow is a visual model that shows how money flows through the market among households…
Q: Suppose the information in the following table is for a simple economy that produces only the…
A: The gross domestic product (GDP) refers to the market value or money value of all the final or…
Q: In the simple-circular flow diagram, the flow of money from the firms to the markets for factors of…
A: Circular flow diagram is a model that shows how money flows among households and firms through…
Q: Which of the following goods would be considered part of consumption (C) by the BEA? The purchase of…
A: GDP by expenditure approach = Consumption + Investment + Government spending + Net exports
Q: Suppose the following information was published by the Australian Bureau of Statistics i
A: In the calculation of gross domestic product, there are some items that can not be included such as…
Q: Which statement best describes the circular flow of an economy? the flow between businesses and…
A: In economics, it can be seen that people interact with one another for making business, economic or…
Q: Consider a simple economy with just two industries: farming and manufacturing. Farming consumes 1/2…
A:
Q: The following diagram presents a circular-flow model of a simple economy. The outer set of arrows…
A: In Market for Goods and Services, firms sell goods and services and household purchase those goods…
Q: The circular flow of income diagram shows: a) how households sell goods to firms b) how firms sell…
A: In the circular flow diagram, households sell their factors of the production to the firms.…
Q: The following diagram presents a circular-flow model of a simple economy. The outer set of arrows…
A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…
Q: consumption per worker is increasing.
A: In the Solow growth model, steady state level is achieved when the investment and the depreciation…
Q: Suppose the information in the following table is for a simple economy that produces only the…
A: * SOLUTION :- *(A) the real GDP for 2020 is = $ 9725.00 The real GDP for 2021 is = $ 10312.50
Q: In the simple circular-flow diagram, markets consist of: Select one: O a. the market for goods and…
A: Macroeconomics analyzes the economy as a whole. It studies the aggregate economic concepts such as…
Q: Which of these statements is true about the circular flow of income? a. Labor services are provided…
A: Circular flow of income refers to the movement of money that flows around the economy.
Q: Consider the following statements (i) Capital goods are final goods and are not used as an input…
A: Capital goods have following characteristics i) they are durable in nature ii) they are used to…
Q: In the circular flow diagram model: O households receive income from businesses in exchange for…
A: A circular flow model illustrates the flow of goods, services, money, etc. among the different…
Q: Tyson and Ella work at the Ruby Red Movie Theater in town. After work, they decide to watch a movie.…
A: In a simple economic model, the circular flow diagram depicts how an economy is structured.…
Q: The following diagram presents a circular-flow model of a simple economy. The outer set of arrows…
A: The circular flow diagram illustrates the flow of goods and services and money between different…
Q: The following diagram presents a circular flow model of a simple economy. The outer set of arrows…
A: A circular flow diagram shows the flow of goods and services between different sectors of an…
Q: Which one of the following is NOT a possible relationship between income and spending Select one: a.…
A: The equation that shows the relationship between the income and spending is written as C=a+bYd Yd is…
Q: Draw a circular-flow diagram. Identify the parts of the model that correspond to the flow of goods…
A: The circular flow diagram representing flow of goods and services and flow of factors of production…
Q: FIGURE 2-3 E F Consumption Goods Refer to Figure 2-3. Which of the following movements will result…
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Suppose the information in the following table is for a simple economy that produces only the…
A: * SOLUTION :- *(A) Cotton is an intermediate good. Thus, it can not be included in GDP calculation…
Q: Use the table and information below to answer the next two questions: Data for Questions 1 & 2…
A: Answer: The consumer price index is used to measure the changes in the prices over a period of time,…
Q: A simple economy consists of three industries: agriculture, manifacturing and services. The…
A: An economy is an integrated where the firms use the inputs of each other to produce some amount of…
Q: The amount of income from an enterprise that obtained through the sale of finished products depends…
A: Revenue is the amount of the income that an enterprise can collect from the sale of its finished…
Q: Fill in the missing values in the table below.
A: Real gdp= Nominal gdp/ price index Nominal gdp =Real gdp× price index Price index = Nominal gdp/Real…
Q: Based on this model, households earn income when purchase in markets for factors of production.…
A: Factors of production refer to the inputs used to produce goods and services. Labor is an example of…
Q: Define intermediate goods and give one example of it.
A: In economics, goods are defined as something which satisfy human wants. A good can be either…
Q: The following diagram presents a circular-flow model of a simple economy. The outer set of arrows…
A: The household sector needs goods & services for usage, therefore they attribute to the…
Q: In the circular-flow diagram, O firms are sellers in the resource market and the product market. O…
A: Circular flow model is a model that shows how money flows in an economy. The flow of money starts…
Q: A farmer produces rutabagas and sells them to the agricultural firm Conagra. Conagra packages the…
A: In a market, a company must select a product that must be manufactured in accordance with the…
Q: Which of the following is NOT accounted in the expenditure approach? a. Food b. Furniture c. Used…
A: GDP is the value of all final goods and services produced in an economy over a period of time. There…
Q: Suppose the information in the following table is for a simple economy that produces only the…
A: ReaL GDP = current year output * prices in base year = Current year output of shoes * price in 2012…
Q: The following diagram presents a circular-flow model of a simple economy. The outer set of arrows…
A: Circular flow shows how goods and services are sold to households and how labor and capital are…
Q: In the circular-flow diagram, the goods markets are where: (a) The households purchase goods from…
A: Answer : (A) The household purchase goods from firms
Q: A changing-basket price index (Passche index) like the GDP deflator tends to: a. underestimate the…
A: CPI is said as the consumer price index. It is a good measure of inflation. It measures the change…
Q: Ross is a senior citizen who consumes food and health care. When he retired in 2002, he consumed 90…
A: Given:- In 2002- Price of meal=$10 Price of medical checkup=$73 In 2012- Price of meal=$11 Price of…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- In the simple circular-flow diagram, a. households own the factors of production. b. households buy all the goods and services that firms produce. c. land, labor, and capital flow from households to firms. d. All of the above are correct.In the circular-flow diagram, which of the following represents a factor market transaction? A) purchase of a new t.v. B) Expenditure on a new pair of pants. C) Payment for a haircut. D) Payment for raw materieals in the production of bikes.Refer to the labor–leisure budget constraint shown to answer the questions. This curve shows trade-offs between income and leisure that must be made over the course of one day. How much does this person earn per hour? $ At point A, how many hours of labor are selected? hourshours At point A, how many hours of leisure are selected? hours
- 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 blue) shows the corresponding flow of inputs and outputs. Based on this model, households earn incomes when ____(options: households, firms) purchase ______ (options: goods and services, inputs) in the markets for inputs. Suppose Kate earns $575 per week working as a doctor for the Medical Clinic. She uses $8 to buy a box of aspirin at Pillmart Pharmacy. Pillmart Pharmacy pays Hubert $225 per week to work the cash register. Hubert uses $225 to purchase medical services from the Medical Clinic. In the following table, identify whether each event in this scenario occurs in the markets for inputs or the markets for outputs. Which of the elements of the previous scenario represent a flow from a firm to a household? This could be a flow of dollars, inputs, or outputs. Check all that apply. A. Kate’s…Roberto is a senior citizen who consumes food and health care. When he retired in 2002, he consumed 90 meals and 3 medical checkups per month. Suppose in 2002 that the price of a meal was $10 and the price of a medical checkup was $64. However, in 2012, the price of a meal is $11 and the price of a medical checkup is $278. As a result, Roberto consumes 100 meals and 2 medical checkups per month. Calculate a Laspeyres cost-of-living index for Roberto using 100 as the base in 2002. In particular, the Laspeyres index for 2012 is nothing. (Enter your response rounded to two decimal places.)An automobile manufacturer uses labor, capital, and a variety of intermediate goods in the production of cars. The car requires $4,000 of steel, $6,000 seats, $10,000 of electronics, $2,000 tires, $10,000 of labor, $5,000 of capital and has a 20% sales markup to consumers. a. What is the total value of intermediate goods? b. What are the total payments to factors of production? c. What is the total value of sales? d. What is the value of GDP from the sale of this car?
- Suppose that aKC = 5, capital used to produce one yard of cloth. aLC = 8, labor used to produce one yard of cloth aKF = 4. capital used to produce one calorie of food aLF = 6. labor used to produce one calorie of food. Which of the following is True? a. Cloth is labor intensive. b. Food is labor intensive. c. Both food and cloth are labor intensive. d. Both food and cloth are capital intensive.Consider the “production” of food, which uses various types of inputs: “labor” (e.g., cooks); “capital” (e.g., restaurants and equipment); and “raw materials” (e.g., ingredients). Suppose that labor accounts for 50% of fast food costs while capital and raw materials account for 25% each. Briefly explain whether each of the following parts are true, false, or uncertain a. If raw material prices double (i.e., increase by 100%) while labor and capital prices are unchanged, then using the same mix of labor, capital, and raw materials will require a 25% increase in expenditures. b. If raw material prices double (i.e., increase by 100%) while labor and capital prices are unchanged, then achieving the same health outcomes (i.e., producing the same amount of “output”) will require a 25% increase in expenditures.Draw a circular-flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the flow of dollars for each of the following activities. Stuart earns $4.50 per hour working at a fast-food restaurant.
- If the ratio of consumption C to income Y is c, then the ratio of income to consumption is: a. 1/(1+c) b. 1-c c. 1/c d. 1/(1-c)An economy has the following Cobb-Douglas production function: ?=100?^(1/3)?^(2/3) . The economy has 125 units of capital and 64 units of labor. d. Calculate the marginal product of capital MPK. e. Calculate the marginal product of labor (MPL).Which 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.