2. The circular-flow model The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Markets for Goods and Services Firms Households Markets for Factors of Production Based on this model, households earn income when purchase in factor markets. Suppose Poornima earns $800 per week working as a corporate attorney for Rowan and Martin Associates. She uses $9 to order a mojito cocktail at Little Havana. Little Havana pays Manuel $200 per week to wait tables. Manuel uses $325 to purchase legal service from Rowan and Martin Associates. Identify whether each of the following events in this scenario occurs in the factor market or the product market. Event Factor Market Product Market Manuel earns $200 per week working for Little Havana. O O Poornima spends $9 to order a mojito cocktail. O O Manuel spends $325 to purchase legal service from Rowan and Martin Associates. O O 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. Poornima's labor O The mojito Poornima receives O The $325 Manuel spends to purchase legal service from Rowan and Martin Associates The $200 per week Manuel earns working for Little Havana