The following diagram presents a circular$-$flow model of a simple economy. The outer set of arrows $($shown in green$)$ shows the flow of dollars, and the inner set of arrows $($shown in red$)$ shows the corresponding flow of inputs and outputs.

One set of outer arrows shows how dollars flow from Households to Markets for Goods and Services, and then from Markets for Goods and Services to Firms. Then outer arrows show how dollars flow from Firms to Markets for Factors of Production, and then back to Households. The inner set of arrows shows how inputs and outputs flow from Markets for Goods and Services to Households, and then to Markets for Factors of Productions. Then inner arrows show how the inputs and outputs flow from Markets for Factors of Productions to Firms, and then back to Markets for Goods and Services.

Based on this model, firms earn revenue whenhouseholds purchase in product markets.

Suppose Hilary earns $$550$ per week working as a cook for Wingies. She uses $$8$ to take a spin class at Silver$$s Gym. Silver$$s Gym pays Edison $$375$ per week to work as a trainer. Edison uses $$200$ to purchase chicken wings from Wingies.

Identify whether each of the following events in this scenario occurs in the factor market or the product market.

Event

Factor Market

Product Market

Edison spends $$200$ to purchase chicken wings from Wingies.

Hilary earns $$550$ per week working for Wingies.

Hilary spends $$8$ to take a spin class.

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

The spin class Hilary receives

The $$200$ Edison spends to purchase chicken wings from Wingies

The $$375$ per week Edison earns working for Silver$$s Gym

Hilary's labor