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How do red eyed tree frogs protect themselves

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Q.1 Explain the circular flow of income in a two sector model.1. Real Flow -Itrefers to the flow of factor services from households to firms and the corresponding flow of goods and services from firms to households. 2. Money Flow -It refersto flow of factor payments from firms to households for their factor services and corresponding flow of consumption expenditures from households to firms for purchase of goods and services produced by the firms. It is also called nominal flow.3. CIRCULARFLOW IN A TWO SECTOR ECONOMY Factor Payments (Rent, Wages, Interest and Profit) Factor Services (Land, Labour, Capital and Enterprise)Consumption Expenditure (On goods and services)Purchase of Goods and Services Q.2 Differentiate between consumption goods and Capital goods.Consumer goods or consumption goodsCapital goods1. These are directly used byultimate consumerhousehold for satisfactionof wants.1. These are fixed assets used bythe producers in the production process.2. These are final goods2. These are final goods.3. They are not used in production by producer.3. They help in production of other goods.4. They may be changed during useby consumer like tea leaves are used to make tea.4. They do not change during production process.5.eg: Durable goods-car, washing machine5. eg: machines ,Plants and equipment used in production process.HOUSEHHOLDSFIRMS
Q.3 What is the difference between Final goods and Intermediate Goods?Final goodsIntermediate goods1. These are ready for final useby consumer for consumptionorBy producer for investment.1.These are not ready for use; they are for resaleor used for further production.2.These are:-(a)Consumer goodsused for satisfaction of wants. They may change during use.(b) Capital goodswhich help in production process. Thy do not transform during use,;2.These are purchased by one firm from another for following purpose:-(a)Resale during the year(b)Use as raw materialin production process. So they may change during production process3. Once sold these pass out of production boundary.3. These are inside the production boundary.4. These are included in national income4. These are not included in national income.Q.4 Differentiate between Stocks and Flows variables .StocksFlows1.Stock variables are measured at a particular point in time.2.They do not have a time dimension,3.Eg: Capital stock, inventory, wealth on a particular day.4.Stock is static concept 1.Flow variables are measured over a period of time,2.They have a time dimension,3.Eg: Capital formation during a year, change in stock, national income during a year.4.Flow is dynamic concept. Q.5Differentiate betweenFactor income and Transfer Income.Factor income or Factor payment Transfer Income or Transfer payment1.It is the income received in return for rendering factor services by the factors of production. It is the income received without any corresponding services. 2.These are included in national income. These are not included in national income 3.Example: Rent, wages, interest, and profit. Retirement pension.Example: old age pension, scholarship of students, unemployment allowance, charity ,gifts, expenditure on birthday / Marriage, pocket money, remittances from abroad, financial help to earthquake victims, beggars, meals to beggars, compensation given to accident victims etc.

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