Answer: Dina's labor the car wash dina receives the $300 per week and charles earns working for spotless car wash
Explanation: The flow from a firm to a household can be in the form of goods and services purchased by the household or in the form of flow of factor income to the household. Out of the given options, Dina's labor in the car wash and Charles earning from spotless car wash represent a flow of income from the firm to the households. While, Charles spending on airline tickets represent a flow from the household to the firm in the form of expenditure for buying a service. So, a and b are correct.
The elements of this scenario that represent a flow from a firm to a household.
The model deals with how Households supply labor to firms and are paid wages in return.
Firms do use labor to produce the items they sell to households. There is therefore a flow of goods from firms to households and a flow of labor services (worker hours) from households to firms.
Businesses and households can be regarded as buyers and sellers in the economy. Businesses sell products to households while exchanging it for money. Households sell products which are the factors of production.
Conclusively, the circular flow model is supplied by households as the households provide labor, capital, and other factors of production to firms.
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