Suppose Yvette earns $575 per week working as an analyst for A-Plus Accountants. She uses $8 to have breakfast at Dinah's Diner. Dinah's Diner pays Sean $300 per week to work as a short-order cook. Sean uses $200 to purchase tax services from A-Plus Accountants. Identify whether each of the following events in this scenario occurs in the market for factors of production or the market for goods and services.

a. Yvette spends $9 to order a mojito cocktail.
b. Dinah spends $175 to purchase medical services from the Medical Clinic.
c. Dinah earns $300 per week working for Little Havana.

Explanation:

Note, the term market for factors of production could also be called the resource market, while the term market for goods and services could be termed as the product market.

In both the first and second scenario, Yvette spending money on mojito cocktail is the same as saying; money is spent in the market where goods and services are exchanged, Dinah spending on medical services is the same as spending on services in general. However, the resource market is where transactions involving the factors of production are traded. In other words, labor (a factor of production) is traded between laborers and their employers.

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