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Suppose Cho earns $625 per week working as work as a flight attendant for Flyaway Airlines. She uses $8 to buy a box of aspirin at Pillmart Pharmacy. Pillmart Pharmacy pays Bob $200 per week to work the cash register. Bob uses $150 to purchase air travel to Hawaii from Flyaway Airlines. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Event Factor Market Product Market Bob spends $150 to purchase air travel to Hawaii from Flyaway Airlines. Bob earns $200 per week working for Pillmart Pharmacy. Cho earns $625 per week working for Flyaway Airlines. 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 aspirin Cho receives Cho's labor The $200 per week Bob earns working for Pillmart Pharmacy The $150 Bob spends to purchase air travel to Hawaii from Flyaway Airlines

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Answer:

Identify whether each of the following events in this scenario occurs in the factor market or the product market.

Suppose Cho earns $625 per week working as work as a flight attendant for Flyaway Airlines.

  • Factor market

She uses $8 to buy a box of aspirin at Pillmart Pharmacy.

  • Product market

Pillmart Pharmacy pays Bob $200 per week to work the cash register.

  • Factor market

Bob uses $150 to purchase air travel to Hawaii from Flyaway Airlines.

  • Product market

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.

  • Cho's labor
  • The $150 Bob spends to purchase air travel to Hawaii from Flyaway Airlines

Product markets basically refer to transactions involving goods and services purchased by consumers. Factor market involve factors of production, e.g. labor and capital.

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