2. The circular-flow model 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 red) shows the corresponding flow of inputs and outputs. Markets for Goods and Services Firms Households Markets for Factors of Production Based on this model, households earn income when purchase in factor markets. firms Suppose Teresa earns $875 per week working as a d ney for Rowan and Martin Associates. She uses $9 to order a mojito cocktail at Little Havana. Little Havana pays Sam $350 per week to w households m uses $200 to purchase legal service from Rowan and Martin Associates.

2. The circular-flow model 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 red) shows the corresponding flow of inputs and outputs. Markets for Goods and Services Firms Households Markets for Factors of Production Based on this model, households earn income when purchase in factor markets. firms Suppose Teresa earns $875 per week working as a d ney for Rowan and Martin Associates. She uses $9 to order a mojito cocktail at Little Havana. Little Havana pays Sam $350 per week to w households m uses $200 to purchase legal service from Rowan and Martin Associates.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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 red) shows the associated flow of inputs and outputs. Firms Markets for Goods and Services Markets for Factors of Production Households Which of the following statements regarding this economic model are true? O While simple, the circular-flow diagram can still be useful for the purposes of modeling how dollars and resources move throughout an economy. O Because it does not take into account international trade, the circular-flow diagram is useless for the purposes of modeling how dollars and resources move throughout an economy. O Because, in reality, the economy is very large, the simplicity of the circular-flow diagram makes it useless for the purposes of modeling how dollars and resources move throughout an economy. O Because it does not take into account the role of government, the circular-flow diagram…
AMoving to the next question prevents changes to this answer. Question 3 of Question 3 1 points Save Answ The branch of economics that analyses the market behaviour of individual consumers and firms in an attemp to understand the decision-making process of firms and households. a)Gross Domestic Product O b)Micro Economics c)Macro Economics d)Logistics e)Gross National Product O0000
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