Chapter 2 Practice Problems Flashcards
Identify the parts of the circular flow diagram immediately involved in the following transactions.
General Motors pays Joe $5000 per month for work on the assembly line.
$5000 of wages from firms to markets for factors of production. Inputs move from markets four factors of production two firms.
They move from households to markets for factors of production, while $5000 income moves from market for factors of production to households.
Identify the parts of the circular flow diagram immediately involved in the following transactions.
Joe gets a $15 haircuts.
$15 of spending from households to markets for goods and services.
Services move from market for goods and services to households.
Services moves from firms to market for goods and services in return for $15 revenue
Identify the parts of the circular flow diagram immediately involved in the following transactions.
Mary Reesie’s $10,000 of dividends on her General Motors stock.
$10,000 of profit from firms to market for goods of production.
Capital moves from market for the factors of production to firms
Capital moves from households to market for factors of production in return for $10,000 income.
Identify the parts of the circular flow diagram immediately involved in the following transactions.
A. Mary buys a car from General Motors for $25,000.
$25,000 of spending from households to markets for goods and services.
Car moves from markets for goods and services to households.
$25,000 of revenue from markets of goods and services to firms, well car moves from firms to markets for goods and services.
