Question

Based on this model, households earn income when (firms /households) purchase (resources/goods and services) in resource markets.

Suppose Becky earns $650 per week working as an analyst for A-plus Accountants. She uses $10 to order a mojito cocktail at Little Havana. Little Havana pays Alex $250 per week to wait tables. Alex uses $250 to purchase tax services from A-Plus Accountants.

Identify whether each of the following events in this scenario occurs in the resource market or the product market.

1.Alex earns $250 per week working for Little Havana. (Resource Market / Product Market)

2. Becky spends $10 to order a mojito cocktail. (Resource Market / Product Market)

3. Becky earns $650 per week working for A-Plus Accountants. (Resource Market / Product Market)

Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply.

( ) The mojito Becky receives

( ) The $250 Alex spends to purchase tax services from A-Plus Accountants

( ) The $250 per week Alex earns working for Little Havana

( ) Becky's labor

Answer 1

Answer:

Based on this model, households earn income when FIRMS purchase RESOURCES in resource markets.

1.Alex earns $250 per week working for Little Havana. Resource Market

2. Becky spends $10 to order a mojito cocktail. Product Market

3. Becky earns $650 per week working for A-Plus Accountants. Resource Market

Which of the elements of this scenario represent a flow from a household to a firm? This could be a flow of dollars, inputs, or outputs. Check all that apply.

( ) The $250 Alex spends to purchase tax services from A-Plus Accountants

( ) Becky's labor