Which of the following transactions takes place in the markets for the factors of production in the circular-flow diagram?
a. Dylan receives a salary for his work as a financial analyst for an investment firm.
b. Kristin buys two business suits to wear to her job as a Chief Information Officer.
c. Jim receives clean water in his home in exchange for paying his water bill.
d. Caroline owns a nail salon and receives payments from her clients for her services.
a
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Suppose the equilibrium price for soft drinks is $1.00. If the current price in the soft drink market is $1.25 each
A) there will be a surplus of soft drinks. B) there will be a shortage of soft drinks. C) the supply curve of soft drinks will shift leftward. D) the demand curve for soft drinks will shift leftward.
Why is the price elasticity of supply greater if there is more time for adjustment to an increase in the price of an item?
What will be an ideal response?
A positional externality occurs when
A. one person builds a house which obstructs his neighbor's view. B. one person's increase in consumption lowers his neighbor's utility. C. a drunk person decides to drive. D. a polluter positions himself in a crowded city.
In the following question you are asked to determine, other things equal, the effects of a given change in a determinant of demand or supply for product X upon (1) the demand (D) for, or supply (S) of, X; (2) the equilibrium price (P) of X; and (3) the equilibrium quantity (Q) of X. An improvement in the technology used to produce X will:
A. decrease S, increase P, and decrease Q. B. increase S, decrease P, and increase Q. C. decrease S, increase P, and increase Q. D. decrease D, decrease P, and decrease Q.