Markets for Goods and Services Households Markets for Factor

Markets for Goods and Services Households Markets for Factors of Production Based on this model, households eam income when- firms purchase goods and servi es-in factor markets. ? Suppose Susan earns $700 per week working as an analyst for A-Plus Accountants. She uses $8 to order a mojito cocktail at Little Havana. Little Havana pays Raphael $400 per week to wait tables. Raphael uses $375 to purchase tax services from A-Plus Accountants Identify whether each of the following events in this scemario occurs in the factor market or the product market. Factor Market Product Market Raphael spends $375 to purchase tax services from A-Plus Acoountants Susan spends $8 to order a mojito cocktal. Raphael eams $400 per week working for Litle Havane which of the elements of ths scenario represent a now from a household to n frn? This could be·Ow of dollars, inputs, or outputs. Check all mat MacBook Pro G Search or type URL 2 4 6 tab caps lock

Solution

The given model shows that households sells factors of production to firms in the market for factors of production.

So,

Based on this model, households earn income when firms purchase factors of production in factor markets.

Event 1
Raphael spends $375 to purchase tax services from A-Plus Accountants.

Raphael is purchasing services from A-Plus Accountants.

Purchase of services takes place in product market.

So, this transaction will occur in Product Market.

Event 2

Susan spends $8 to order a mojito cocktail.

Susan is purchasing a good.

Purchase of good takes place in Product Market.

So, this transaction will occur in Product Market.

Event 3

Raphael earns $400 per week working for Little Havana.

Raphael is earning by supplying his labor.

Labor is supplied in factor market.

So, this transaction will occur in factor market.

A flow from household to firm can be in form of payment for goods and services purchased from firm or supply of factors of production to firms.

Thus,

The $375 Raphael spends to purchase tax services fro A-Plus Accountants and Susan\'s labor indicate flows from a household to a firm.

Hence, the correct answer is the option (3) and (4).