In the circular flow model, the value of total income for an ...

[tsand2]

In the circular flow model, the value of total income for an economy ________ the value of total production.
 
  A) equals B) is greater than
  C) may be greater than or less than D) is less than

Question 2

Comment on the following statement: I decided to buy a car from a dealer in a town 100 miles away because he was offering a price that was 100 lower than the dealer in my hometown. Therefore, I saved 100
 
  What will be an ideal response?

[mjenn52]

Answer to Question 1

A

Answer to Question 2

Assuming that the individual had no other reason to travel the 100 miles, the savings from the purchase of the car is less than 100 . Travel costs should be taken into account, including the opportunity cost of time.