A Determinant of the Demand for a Factor of Production

question 104

Multiple Choice

A determinant of the demand for a factor of production is the:

• A) price of the factor.
• B) marginal cost of the factor.
• C) quantity of the factor supplied.
• D) price of the product made with the factor.

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Definitions:

Moral-Hazard

Moral hazard is a situation in which one party is more likely to take risks because the negative consequences of the risk will be felt by another party.

Monitoring Employees

The process of overseeing employees' work activities and performance, often through the use of technology or other means.

Asymmetric Information

A situation in which one party in a transaction has more or superior information compared to another.

Prevalent

Widespread in a particular area at a particular time; commonly occurring or accepted.