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2. The circular-flow model The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the Inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Markets for Goods and Services Firms Households Markets for Factors of Production Based on this model, firms earn revenue when purchase in product markets Suppose Rosa carns $825 per week working as a corporate attorney for Rowan and Martin Associates. She uses $10 to order a mojito cocktail at Little Havana, Little Havana pays Nick 5450 per week to wait tables. Nick uses $400 to purchase legal service from Rowan and Martin Associates Based on this model, firms earn revenue when purchase in product markets. Suppose Rosa earns $825 per week working as a corporate attorney for Rowan and Martin Associates. She uses $10 to order a mojito cocktail at Little Havana. Little Havana pays Nick $450 per week to wait tables. Nick uses $400 to purchase legal service from Rowan and Martin Associates identity whether each of the following events in this scenario occurs in the factor market or the product market. Event Factor Market Product Market Rosa earns $825 per week working for Rowan and Martin Associates. Rosa spends $10 to order a mojito cocktail. Nick earns $450 per week working for Little Havana 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 $400 Nick spends to purchase legal service from Rowan and Martin Associates The $450 per week Nick earns working for Little Havana Rosa's labor The mojito Rosa receives

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