Subjects economics

Circular Flow 7B1Ae2

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1. The problem asks which two arrows represent the transaction where Lizzie Haxem hires "The Paint Pros" to paint her home. 2. In the circular flow diagram: - Households provide factors of production to Factor Markets (arrow J). - Factor Markets supply factors to Firms (arrow M). - Firms produce goods and services sold in Product Markets (arrow G). - Households buy goods and services from Product Markets (arrow K). 3. Hiring a painting company means Lizzie (a household) is buying a service from a firm. 4. This transaction involves the flow of money from Households to Product Markets (arrow K) and the flow of goods/services from Firms to Product Markets (arrow G). 5. Therefore, the two arrows depicting this transaction are K and G. Final answer: C. K and M is incorrect because M is from Factor Markets to Firms, not related to the purchase. Correct choice is B. K and G.