2.1.3Practice:Creating a Circular Flow Diagram

Practice

Economics (2020)

Points Possible:10

Name:

Joo Hyung Lee

Date:

Section 1: Creating a Circular Flow Diagram

Read this article about the history of Starbucks Corporation from HistoryLink.org:"Starbucks: The Early Years"by Sheila Farr. As you read, find at least one example of every major group in a typical circular flow diagram, including:

• A business
• A resource market
• A household
• A product market

Also find examples of a resource, good, service, or dollar amount that flowed between each of the four groups you identified. More specifically, these examples should include:

• A resource from a resource market that a business used
• A productive resource (labor) that a household supplied to a resource market
• An expenditure a household made by buying a product
• A product a household bought from the product market
• Revenue a business made from the product market
• A good or service a business provided to the product market

Once you have identified at least one example for each item in the list above, fill out the blank circular flow diagram below.Keep in mind that the reading may provide multiple examples for each item. You only need to mention one or two examples, but make sure they are clear so your instructor can easily find them in the article. Also keep in mind that since the "income" and "wages, interest, net profit" categories are not explicitly mentioned in the reading, these details have been filled in for you. (4 points)

Product market enditures Revenue Products Goods ds and rvices Household Business 0 resour ductive ources Resour Resource market Income Wages, interest, net An average barista makes Interest on loans, $10.45 an hour (Bureau of Labor Statistics) payment of baristas, etc. 0