1. Draw a circular flow diagram. Identify the parts of the model that correspond to the flow of goods and services and the follow of money for each of the following activities.

• Alain pays a storekeeper P100 for a liter of milk.
• John earns P90 per hour working at a fast-food restaurant
• Hanna spends P120 to get a haircut
• Anton earns P100,000 from his retailing business.

2. Graph a production possibilities frontier and illustrate the concepts of trade-off and opportunity cost.