Consider five individuals with different occupations. If this economy has money
A) Allen will buy from Betty
B) Betty will buy from Calvin
C) Eric will buy from Allen
D) None of the above are correct.

Question

Consider five individuals with different occupations.  If this economy has money
A) Allen will buy from Betty 
B) Betty will buy from Calvin 
C) Eric will buy from Allen 
D) None of the above are correct.

Quizplus · Accepted Answer

This is an example of the circular flow of income model, where money flows from households to firms and back to households. In this scenario, it is logical to assume that each individual is a household and they also represent a firm where they produce goods or services.
 
Given the options, Betty is the only one selling a good or service mentioned in the scenario. Therefore, it is most likely that the other individuals (Allen, Calvin, David, and Eric) will have to purchase from Betty. As a result, the best choice would be B. Betty will buy from Calvin.

Consider Five Individuals with Different Occupations