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:

Economics

The social science that studies how individuals, governments, firms, and nations make choices on allocating scarce resources to satisfy their unlimited wants.

Predictable

Able to be foreseen or declared in advance; capable of being predicted.

Absolute Value

The non-negative value of a real number without regard to its sign; it represents the distance of a number on the number line from the origin.

Budget Line

A graphical representation of all possible combinations of two goods which a consumer can afford given their income and the prices of the goods.