Question

Markets for Goods and Services Firms Households Markets for Factors of Production Based on this model, firms earn revenue when firms purchase factors in product markets. Suppose Juanita earns $850 per week working as an analyst for A-Plus Accountants. She uses $10 to order a mojito cocktail at Little Havana. Little Havana pays Gilberto $300 per week to wait tables. Gilberto uses $125 to purchase tax services from A-Plus Accountants. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Event Factor Market Product Market Gilberto earns $300 per week working for Little Havana. Juanita earns $850 per week working for A-Plus Accountants. Juanita spends $10 to order a mojito cocktail. 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 $125 Gilberto spends to purchase tax services from A-Plus Accountants The mojito Juanita receives Juanita's labor The $300 per week Gilberto earns working for Little Havana Grade It Now Save & Continue

Answer 1

Based on this model, firms earn revenue when firms households purchase products in product markets.

Gilberto earns $300 per week working for Little Havana.: This event occurs in the factor market because Gilberto works in Little Havana and get paid for its services.

Juanita earns $850 per week working for A-Plus Accountants : This event occurs in the Factor markets because Juanita is earning for her labor services.

Juanita spends $10 to order a mojito cocktail.: This event occurs in the product market because Juanita is spending money to buy a good.

The $125 Gilberto spends to purchase tax services from A-Plus accountants: This represent the flow of dollars from households to firm.

Juanita's labor : This represents the flow of inputs from household to firm.

The $300 per week Gilberto earns working for Little Havana.: This represents the flow of dollars from firm to household.

Hence, option(A) and (B) represents the flow from household to firm.