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:

Framing Error

A cognitive bias where people make decisions based on the way information is presented rather than just the facts themselves.

Lack-of-participation Error

A mistake or oversight that occurs when not all relevant parties are involved in a decision-making process, leading to potential biases or incomplete information.

Escalation Error

Escalation Error refers to the phenomenon where individuals or groups continue to invest in a decision despite new evidence suggesting it may be wrong, often due to sunk costs or ego.

Decision-making Process

A series of steps undertaken by individuals or organizations to select the best course of action among several alternatives.