Which of the Following Statements Is True of Factor Markets

question 191

Multiple Choice

Which of the following statements is true of factor markets?
(i) when the supply of a factor falls, its equilibrium price falls
(ii) when the supply of a factor rises, its equilibrium price falls
(iii) when the supply of a factor falls, its equilibrium price rises

• A)(i) and (ii)
• B)(ii) and (iii)
• C)(i) and (iii)
• D)(i), (ii) and (iii)

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Definitions:

Tariffs

Tariffs are taxes imposed by a government on imported goods and services, often used to protect domestic industries from foreign competition.

Efficient Industries

Industries that achieve maximum output with minimum input, utilizing resources in the most cost-effective manner.

Allocation of Resources

The distribution of available resources, including land, labor, and capital, among various uses to maximize efficiency and effectiveness.

Foreign Demand

The desire and willingness of buyers in other countries to purchase goods and services from a particular nation.