The Fundamentals of Economics

The flow of goods and services would best be represented from ____ to ___

• Households to Factor Market
• Households to Product Market
• Product Market to Households
• Businesses to Product Market

The money that households spend would best be represented from ____ to ___

• Households to Factor Market
• Households to Product Market
• Product Market to Households
• Businesses to Product Market

The flow of land, labor, and capital would best be represented from ____ to ___

• Households to Factor Market
• Households to Product Market
• Product Market to Households
• Businesses to Product Market

Alisa purchases her school supplies at Target. Frank likes to get his haircut at Great Clips. If the flow of school supplies from Target to Alisa is represented by an arrow from Box D to B of this circular-flow diagram, then the haircut that Frank got from Great Clips is represented by an arrow

• From Box A to Box D
• From Box B to Box D
• From Box C to Box B
• From Box D to Box B

If businesses are sellers in the markets represented by Box C of this circular-flow diagram, then

• Box C must represent the markets for factors of production
• Box B must represent the markets for goods and services
• Firms are buyers in the market represented by Box D
• All of the above are correct

You are the owner of a toy factory and Christmas time is right around in the corner. In order to handle the new demand for toys, you will need to hire more employees. If the revenue from your toys is represented by the flow of money from Box D to A, then the new workers coming to work for you is represented by an arrow

• From Box A to Box C
• From Box B to Box D
• From Box C to Box A
• From Box D to Box B

Maria works for her uncle at his bike shop and gets paid an hourly wage. Her brother also works at the bike shop but gets paid on commission and does not receive an hourly wage. If Maria’s wage is represented by a flow of dollars from Box B to Box D, then her brother’s commission is represented by a flow of dollars from

• From Box D to Box B
• From Box B to Box D
• From Box A to Box C
• From Box C to Box A

If the buyers of land, labor, and capital are represented by Box B of this circular-flow diagram, then

• Businesses are represented by Box C
• Businesses are represented by Box A
• Households are represented by Box A
• Households are represented by Box C

Tim regularly buys gas at Holiday. Lindsey regularly pays people to change her oil for her. If the flow of gas from Holiday to Tim is represented by an arrow from Box C to Box B of this circular-flow diagram, then the money paid by Lindsey to the oil change company is represented by an arrow _______

• From box B to box C
• From box D to box B
• From box A to box C
• From box C to box B

If the flow of goods and services is part of what is represented by the inner loop of this circular-flow diagram, then

• The flow of factors of production is also part of what is represented by the inner loop
• The flow of income paid to households is part of what is represented by the inner loop
• The flow of revenue to firms is also part of what is represented by the inner loop
• Households must be sellers of output