For each of the following activities, identify the flow of dollars as either household-to-firm or firm-to-household.
Activity
Latasha pays a storekeeper $1 for a quart of milk.
Alyssa earns $10,000 from 40% ownership of her family business.
Jake earns $8 per hour working at a fast-food restaurant.
Rosa spends $100 for a plano lesson.
Flow of Dollars

Answers

Answer 1

Thus, households and businesses exchange expenditures for products and services, while businesses and households exchange revenue in the form of wages, rent, and profits.

What does business to household flow refer to?Thus, households and businesses exchange expenditures for products and services, while businesses and households exchange revenue in the form of wages, rent, and profits.It demonstrates the connections between businesses and households that occur in the product and factor marketplaces. In the diagram, it should be noted that homes and businesses are not connected to one another; instead, they are connected to the two marketplaces.Because of the rising opportunity cost, the production possibility frontier is shaped like a bow.Thus, households and businesses exchange expenditures for products and services, while businesses and households exchange revenue in the form of wages, rent, and profits.            

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