Question

uppose Beth earns $700 per week working as a programmer for PC Pros. She uses $8 to buy a box of aspirin at Pillmart Pharmacy. Pillmart Pharmacy pays Andrew $450 per week to work the cash register. Andrew uses $275 to purchase software from PC Pros.

Identify whether each of the following events in this scenario occurs in the market for factors of production or the market for goods and services.

Event	Market for Factors of Production	Market for Goods and Services
Andrew earns $450 per week working for Pillmart Pharmacy.
Beth spends $8 to buy a box of aspirin.
Andrew spends $275 to purchase software from PC Pros.

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

The $450 per week Andrew earns working for Pillmart Pharmacy

Beth's labor

The aspirin Beth receives

True or False: The actual economy is more complicated than the one illustrated in the previous circular-flow diagram of a simple economy.

True

False

Answer 1

Question 1). Answer :-

Event	Market for Factors of Production / Market for Goods and Services
i). Andrew earns $450 per week working for Pillmart Pharmacy.	Market for Factors of Production (Resource market).
ii). Beth spends $8 to buy a box of aspirin.	Market for Goods and Services (Product market)
iii). Andrew spends $275 to purchase software from PC Pros.	Market for Goods and Services (Product market)

Question 2). Answer :- Option a). The $450 per week Andrew earns working for Pillmart Pharmacy.

Option c). The aspirin Beth receives.

Question 3). Answer :- True.