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 labor B. The $225 per week Hubert earns working for Pillmart Pharmacy C. The aspirin Kate receives
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 labor B. The $225 per week Hubert earns working for Pillmart Pharmacy C. The aspirin Kate receives
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
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 labor
B. The $225 per week Hubert earns working for Pillmart Pharmacy
C. The aspirin Kate receives
Transcribed Image Text:Sales receipts
Goods and services
Markets for
Expenditures
Goods and services
Outputs
Households
Businesses
Labor, capital, etc.
Labor, capital, etc.
Wages, interest, etc.
Incomes
Markets for
Inputs
Transcribed Image Text: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.
Event
Markets for Inputs
Markets for Outputs
Hubert earns $225 per week working for Pillmart Pharmacy.
Kate spends $8 to buy a box of aspirin.
Kate earns $575 per week working for the Medical Clinic.
Expert Solution
Step 1
A circular flow diagram shows the flow of goods and services between different sectors of an economy. A two sector model includes only firms and households.
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education