Factor X Is Used in the Production of Good Y

question 51

Multiple Choice

Factor X is used in the production of good Y. Which of the following will increase the demand for factor X?

• A)a decrease in the demand for Y
• B)a rise in the MPP of factor X
• C)a fall in the price of good Y
• D)a fall in the cost of employing factor X

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Definitions:

Economic Efficiency

A situation where resources are allocated in a way that maximizes the net benefit to society.

Market Demand Curve

A graphical representation that shows the total quantity of a good or service that all consumers in a market are willing and able to purchase at various prices.

Marginal Benefit

The gain in utility or satisfaction derived from the additional consumption of a unit of a good or service.

Marginal Benefit

The enhanced benefit or happiness one achieves by using an extra unit of any good or service.