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.

Based on this model, households earn income whenfirms purchasefactors in factor markets.

Suppose Sharon earns $700 per week working as a corporate attorney for Rowan and Martin Associates. She uses $8 to buy a box of aspirin at Pillmart Pharmacy. Pillmart Pharmacy pays Paolo $375 per week to work the cash register. Paolo uses $125 to purchase legal service from Rowan and Martin Associates.

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

Event	Factor Market	Product Market
Sharon earns $700 per week working for Rowan and Martin Associates.
Paolo earns $375 per week working for Pillmart Pharmacy.
Sharon spends $8 to buy a box of aspirin.

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 aspirin Sharon receives

The $125 Paolo spends to purchase legal service from Rowan and Martin Associates

Sharon's labor

The $375 per week Paolo earns working for Pillmart Pharmacy