Principles of Economics (MindTap Course List)
8th Edition
ISBN: 9781305585126
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 2, Problem 1PA
To determine
Circular-flow diagram.
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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.
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.
Sam pays a storekeeper $1 for a quart of milk.
Sally earns $4.50 per hour working at a fast food restaurant.
Serena spends $7 to see a movie.
Stuart earns $10,000 from his 10 percent ownership of Acme Industrial.
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.
Kaleem pays a shopkeeper Rs.150 for a liter of milk.
Mustaqeem while working at a fast-food restaurant earns Rs.500 per hour.
Sana spends Rs.500 on a haircut.
Mustafa receives Rs.200,000 from his 10 percent ownership of Salman Chemicals Ltd.
Chapter 2 Solutions
Principles of Economics (MindTap Course List)
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- Discuss the circular flow diagram based on your own understanding and give an example where you participated in each market as member of a household.arrow_forwardDraw a circular flow diagram. Determine the parts of the model that correspond to theflow of goods and services and the flow of dollars for each of the following activities.i. Tupperware Company earns RM10 revenue on average from each water bottlesold.ii. Carmen earns RM6 wages per hour working at Seoul Garden restaurant.iii. Ms. Kek spends RM40 to get a haircut.iv. Ms. Goh earns RM3, 000 rental income from her 10 percent ownership of landproperty.arrow_forwardDraw a circular-flow diagram. Identify the partsof the model that correspond to the flow of goodsand services and the flow of dollars for each of thefollowing activities.a. Selena pays a storekeeper $1 for a quart of milk.b. Stuart earns $8 per hour working at a fast-foodrestaurant.c. Shanna spends $40 to get a haircut.d. Salma earns $20,000 from her 10 percentownership of Acme Industrial.arrow_forward
- 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.arrow_forwardDraw 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.arrow_forwardIllustrate using the circular flow model how resources are utilized by household and the business sectorarrow_forward
- 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_forward. 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. Paul purchases a pair of shoes for $30 Shannon receives a salary of $1,500 per week at the supermarket which she works Honda Limited receives $20,000 for the sale of a sports utility vehicle Mark earns $2,000 from his 15 percent ownership of Apple stock Classify each of the following statements as positive or normative. Explain. Bahamas faces a trade-off between inflation and unemployment The ECCB should reduce the interest rates St. Lucia ought to provide a pension for all citizens. 4.Higher tax rates discourage savings and working Show in a diagram the effect on the demand curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following scenarios. The market for gasoline Scenario 1: Electric…arrow_forwardEconomy 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. Kaleem pays a shopkeeper Rs.150 for a liter of milk. Mustaqeem while working at a fast-food restaurant earns Rs.500 per hour.arrow_forward
- Explain how , in the basic Circular Flow diagram, households and firms can be thought of as both consuming and producing?arrow_forwardIn a circular flow diagram which one of the follwing transactions happens in the market for goods and services and which one in the market for factors of production? A.) Selena pays a storekeeper $2 for a quart of milk- D.) Salma earns $1000 dividend from the stocks she has-arrow_forwardi. Draw a circular-flow diagram and Identify the parts of the model that correspondto the flow of goods and services and the flow of dollars when Paul purchases a pair of shoes for $30. ii. Draw a circular-flow diagram and dentify the parts of the model that correspondto the flow of goods and services and the flow of dollars whenShannon receives a salary of $1,500 per week at the supermarket whichshe works. iii. Draw a circular-flow diagram and dentify the parts of the model that correspondto the flow of goods and services and the flow of dollars when Honda Limited receives $20,000 for the sale of a sports utility vehicle. iv. Draw a circular-flow diagram and dentify the parts of the model that correspondto the flow of goods and services and the flow of dollars whenMark earns $2,000 from his 15 percent ownership of Apple stock. B.Classify The following statements as positive or normative. Explain. I.Higher tax rates discourage savings and working.arrow_forward
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