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For each of the following activities, identify the flow of goods and services or factors of production as either household-to-firm or firm-to-household.

Yakov earns $8 per hour working at a fast-food restaurant.
Juanita earns a profit of $5,000 from her grocery bus mass.
Ana pays a storekeeper $2 for a quart of yogurt.
Dina spends $100 for a piano lesson.

Respuesta :

Answer:

  1. Factors of production, household-to-firm
  2. Factors of production, household-to-firm
  3. Goods and services, firm-to-household
  4. Goods and services, firm-to-household

Explanation:

As per Circular Flow of Income

  • Households provide firms with factors of production - Land, Labour, Capital, Entrepreneur. They get factor incomes from firms - wages, rent, interest, profit in return.
  • Firms provide households with goods & services, get prices for them in return.
  1. Yakov earning 'wage' by working i.e supplying 'labour' services : is flow of factor of production from households to firm .
  2. Juanita earning 'profit' by supplying 'entrepreneurship' service : is flow of factor of production from households to firms
  3. Ana paying 'price' for good 'yoghurt' : is flow of goods & services from firms to households
  4. Dina paying 'price' for service 'piano lesson' : is flow of goods & services from firms to households