Loose Leaf for Microeconomics
20th Edition
ISBN: 9780077660901
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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Part A: Give a specific example of something a household would buy or sell in the product market.
Part B: In the circular flow diagram, what is a specific example of what you would buy or sell in the factor market.
Which statement best describes the circular flow of an economy?the flow between businesses and resourcesthe exchange of money, goods, and services in an economya circular flow happens only in a resource marketa circular flow happens only in a goods and services market
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.
Chapter 2 Solutions
Loose Leaf for 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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- 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. 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_forwardQ1. 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_forward
- One of the three basic questions an economy has to face is (blank) goods and services will be produced. a) where b) when c) which d) whyarrow_forwardGraph and label as either direct or indirect the relationships you would expect to find between (a) the number of inches of rainfal per month and the sale of umbrellas, (b) the amount of tuition and the level of enrollment at a university, and (c) the popularity of an entertainer and the price of her concert tickets.arrow_forwardExplain the circular flow diagramarrow_forward
- 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?arrow_forwardIn 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.arrow_forward1. 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. a. Selena pays a storekeeper $1 for a liter of milk. b. Stuart earns $4.50 per hour working at a fast-food restaurant. c. Shanna spends $30 to get a haircut. d. Salma earns $10,000 from her 10% ownership of Acme Industrial.arrow_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_forwardPls help with below homework. Define goods and services market, labor market, and money market. Also explain relationship between them.arrow_forwardExplain all the components involved to establish circular flow diagram. Explain the mechanism in sequence through which different agents like households and firms interact in different markets like market for goods and market for factors. Make this clear that how the joint of these agents and markets establishes the existence of a circular flow diagram.arrow_forward
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