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Suppose Beth earns $500 per week working as work as a flight attendant for Flyaway Airlines. She uses $10 to have breakfast at Dinah's Diner.

Suppose Beth earns $500 per week working as work as a flight attendant for Flyaway Airlines. She uses $10 to have breakfast at Dinah's Diner. Dinah's Diner pays Andrew $375 per week to work as a short-order cook. Andrew uses $375 to purchase air travel to Hawaii from Flyaway Airlines.

Identify whether each of the following events in this scenario occurs in the market for factors of production or the market for goods and services.

Event

Market for Factors of Production

Market for Goods and Services

Andrew spends $375 to purchase air travel to Hawaii from Flyaway Airlines.
Beth earns $500 per week working for Flyaway Airlines.
Beth spends $10 to have breakfast.

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

The $375 Andrew spends to purchase air travel to Hawaii from Flyaway Airlines

Beth's labor

The breakfast Beth receives

True or False: Gross domestic product (GDP) cannot be used to measure the economy’s income.

True

False

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