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1 Find house @ Find Factor / Resource market AP- Circle Flow Model 3 Find arow Product Market HH - Firm B Firms Households C D Factor Market 1. The circle flow diagram starts with two economic decision making units: the Household and the Firms 2. The exchanges take place in two different markets: the Factor market and the Product market 3. Firms are buyers in the market . Households are buyers in the market. 5. Mary buys a car from a Jaguar dealership. Which market? a. Where in the circle flow will Mary buy the car? Arrow 6. BMW pays John $3500 a month for his assembly line work. Which market? a. Where in the circle flow will John receive his paycheck? Arrow 7. AT&T sells a cell phone to Maurice. Which market? a. Where in the circle flow will the phone be sold? Arrow 8. Maurice receives $1,000 of dividends (profit on his stocks/financial capital). Which market? a. Where in the circle flow will Maurice receive the income? Arrow 9. Adam uses his paycheck to make monetary contributions to the purchase of gasoline. Which market? a. Where in the circle flow will Adam buy the gas? Arrow 10. Allison grocery shops at Kroger. Which market? a. Where in the circle flow will Allison purchase her groceries? Arrow 11. George invents a better mousetrap. Which market?_ a. Where in the circle flow will George sell his invention to Walmart? Arrow b. Where in the circle flow will George receive payment for his invention? Arrow