Question

Suppose Janet earns $700 per week working as a jewelry appraiser for Classy's Jewelry Store. She uses $10 to buy a box of aspirin at Pillmart Pharmacy. Pillmart Pharmacy pays Felix $450 per week to work the cash register. Felix uses $100 to purchase a necklace from Classy's Jewelry Store.

Identify whether each of the following events in this scenario occurs in the factor market or the product market.
a. Felix earns $450 per week working for Pillmart Pharmacy.
b. Janet earns $875 per week working for Classy's Jewelry Store.
c. Felix spends $325 to purchase necklace from Classy's Jewelry Store.

Answer 1

A) Felix earns $450 per week working for Pillmart Pharmacy. Resource market: Felix sells his resources (labor) to the Pillmart Pharmacy in exchange for a salary.

B) Janet earns $875 per week working for Classy's Jewelry Store. Resource market: Janet sells her resources (labor) to the Classy's Jewelry Store in exchange for a salary.

C) Felix spends $325 to purchase necklace from Classy's Jewelry Store. Product market: the Classy's Jewelry Store sells its products to Felix.