$2.$ The circular flow model

The following diagram presents a circular flow model of a simple economy. The outer set of arrows $($shown in red$)$ shows the flow of dollars, and the inner set of arrows $($shown in blue$)$ shows the corresponding flow of inputs and outputs. $($Note: The market for outputs, also known as the product market, is any market where firms$$ products are bought and sold. The market for inputs, also known as the factor market, is any market where factors of production are bought and sold.$)$

Based on this model, households earn income when purchase in the factor markets.

Suppose Kyoko earns $$675$ per week working as a corporate attorney for Rowan and Martin Associates. She uses $$10$ to order a mojito cocktail at Little Havana. Little Havana pays Jacques $$275$ per week to wait tables. Jacques uses $$150$ to purchase legal service from Rowan and Martin Associates.

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

Event

Factor Markets

Product Markets

Jacques spends $$150$ to purchase legal service from Rowan and Martin Associates.

Kyoko spends $$10$ to order a mojito cocktail.

Kyoko earns $$675$ per week working for Rowan and Martin Associates.

Which of the elements of this scenario represent a flow from a business to a household? This could be a flow of dollars, inputs, or outputs. Check all that apply.

The $$150$ Jacques spends to purchase legal service from Rowan and Martin Associates

The $$275$ per week Jacques earns working for Little Havana

Kyoko's labor