Principles of Microeconomics
7th Edition
ISBN: 9781305156050
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.
Draw 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.
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Principles of Microeconomics
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- 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.arrow_forward1. 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_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. Sana spends Rs.500 on a haircut. Mustafa receives Rs.200,000 from his 10 percent ownership of Salman Chemicals Ltd.arrow_forward
- Draw 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_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. 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_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
- Illustrate using the circular flow model how resources are utilized by household and the business sectorarrow_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_forwardDiscuss 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_forward
- Q1. Draw a circular flow diagrm. Identify the parts of model that corresponds to flow of goods and services and the flow of dollar for each of the following activites. Ahmed earns Rs 200 per houir working in a factory Ayesha spend Rs1500 for a pizza “Eat More” bakery pay Rs 2500 for the rent on its shop Maya purchases a new pair of earrings for Rs 250arrow_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_forwardUsing the basic circular flow model, explain whythe value of businesses’ output of goods andservices equals the income of households.arrow_forward
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