Question : 21) In the circular flow model, the factors of production : 1241377

21) In the circular flow model, the factors of production flow in the

A) same direction as do the rents, wages, interest, and profits.

B) opposite direction as do the rents, wages, interest, and profits.

C) opposite direction as does the government.

D) same direction as does the goods market.

E) opposite direction as does the goods market.

22) In the goods market, firms ________ and households ________.

A) purchase goods and services; supply goods and services

B) supply land, labor, capital, and entrepreneurship services; hire land, labor, capital, and entrepreneurship services

C) pay rent, wages, interest, and profit; earn rent, wages, interest, and profit

D) supply goods and services; purchase goods and services

E) hire land, labor, capital, and entrepreneurship services; supply goods and services

23) In the factor market, firms ________ and households ________.

A) hire land, labor, capital, and entrepreneurship services; purchase goods and services

B) supply land, labor, capital, and entrepreneurship services; hire land, labor, capital, and entrepreneurship services

C) pay rent, wages, interest, and profit; earn rent, wages, interest, and profit

D) purchase goods and services; supply goods and services

E) supply goods and services; purchase goods and services

24) Which of the following transactions takes place in factor markets?

A) Henry receives a commission from his employer for selling a new automobile.

B) Jake purchases 1,000 shares of stock in the Wal-Mart Corporation through his online trading account.

C) Sam enters the winning bid on a grand piano at a local auction.

D) Justin receives $30 in exchange for mowing his neighbor’s lawn.

E) Lucille receives a $500 check from the U.S. Social Security Administration.

25) Which markets are depicted in the basic circular flow model?

A) the goods market and the stock market

B) the factor market and the bond market

C) the goods market and the factor market

D) the money market and the foreign exchange market

E) the stock market and the bond market

26) In the circular flow model, which of the following flows in the opposite direction from the flow of factors of production?

A) finished goods and services

B) wages, rent, interest, and profit

C) interests payments of Federal, state, and local governments

D) firm’s profit incentives

E) the goods market

27) Terri is enrolled in her first economics course. She is required to give a presentation about the circular flow. Which of the following statements should she include in her presentation?

A) Households choose the amount of the factors of production to provide the firms.

B) Firms choose the amount of the factors of production to provide households.

C) Households receive wages for the amount of entrepreneurship they provide firms.

D) Firms pay wages for the amount of entrepreneurship they provide households.

E) The flows of goods and services and payments for the goods and services flow in the same direction.

28) Aaron locked himself out of his house and had to pay $40 to Brianna, who works for Lucky Locksmith, to open his door. Based on this transaction in the economy and using concepts from the circular flow model, which of the following is true?

A) Brianna earned income from supplying her labor services.

B) Aaron earned income from supplying his labor services.

C) Brianna purchased goods and services.

D) Aaron acted as a firm in this transaction.

E) Aaron supplied goods and services.

29) In the circular flow model,

A) the government is represented as a separate market.

B) the government buys goods and services from firms.

C) goods and services are sold by households and purchased by firms.

D) factor markets are where goods rather than services are bought and sold.

E) the government has no direct interaction with either households or firms.

30) In the circular flow model with the government sector, transfers

A) flow in the same direction as do taxes.

B) flow in the opposite direction as do taxes.

C) to households flow in the same direction as do expenditures on goods and services.

D) to firms flow in the same direction as do rent, wages, interest, and profits.

E) flow only through the goods market.