If the Demand for a Good Increases, the Demand for the Factors

question 13

Multiple Choice

If the demand for a good increases, the demand for the factors used to produce the good

• A) increases.
• B) stays the same.
• C) decreases.
• D) could increase, decrease or stay the same depending on whether the demand for the good is elastic, inelastic or unit elastic.
• E) None of the above answers is correct.

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Definitions:

Artificially Scarce Good

A product or service whose supply is intentionally restricted to increase its price or value, often contrary to its natural abundance.

Pay-Per-View

A service by which viewers can purchase events to be viewed on television and pay for the private telecast of that event to their homes.

External Cost

Costs incurred by a third party due to an economic activity but not accounted for by the producer or consumer.

Marginal Costs

An additional delineation of the expenses incurred in the production of one more unit of a product.