Which of the following best illustrates the circular flow model in action?
A. Bobbie goes to work and builds cars, and uses the income she receives to buy food at the
grocery store.
B. Evan buys a new couch; the owner of the furniture store uses some of the money from the
sale to pay her supplier, and uses the rest to take her family out to dinner.
C. Boeing experiences a surge in orders for new airplanes, prompting the company to hire
more workers.
D. All of these answers illustrate the workings of the circular flow model.
Answer: D
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Hyperinflation is defined as
A) declining inflation rates. B) rising but low inflation rates. C) very high inflation rates. D) very low inflation rates.
In the figure above, if no one owns the lake, at the equilibrium quantity what is the marginal social cost of producing the pesticide?
A) $80 B) $40 C) $60 D) $30