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.
Circular Flow 7B1Ae2
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