1. What is the Circular Flow model? What are the main components of the model? What each market in the model is meant to do?
2. Consider the restaurant Jack in the Box. As a student, you visit Jack in the Box every week. After graduating college, you (and many other students) started a job paying more than $60,000 per year.Assuming that the number of graduating students is large enough to influence the market, what will happen to the equilibrium price and quantity of Jack in the Box burgers? Please explain? (hint: assume these burgers are inferior good).