If the Cost of a Particular Factor of Production Accounts

question 109

Multiple Choice

If the cost of a particular factor of production accounts for a large percentage of the total cost of producing some good, we can expect the demand for this factor of production to

• A) be relatively elastic.
• B) have an elasticity equal to zero.
• C) be perfectly inelastic.
• D) have an elasticity equal to one.
• E) be relatively inelastic.

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Definitions:

Desirability

The attractiveness or appeal of something, often influenced by factors such as quality, utility, or scarcity.

Sum Of Money

A specific amount of currency or funds, often specified for particular transactions or savings.

Future

A legal contract to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future.

Interest Rate

The percentage charged on a loan or paid on savings over a specific period, representing the cost of borrowing or the reward for saving.