Which of the Following Correctly Identifies the Difference Between the Demand

question 102

Multiple Choice

Which of the following correctly identifies the difference between the demand for factors of production and the demand for final goods?

• A) The demand for factors of production is fixed over time, whereas the demand for final goods changes with changes in tastes and preferences.
• B) The demand for final goods is fixed over time, whereas the demand for factors of production changes with changes in tastes and preferences.
• C) The demand for final goods is derived from the demand for labor, whereas the demand for factors of production is independent of the demand for final goods.
• D) The demand for factors of production is derived from the demand for final goods, whereas the demand for final goods is independent of the demand for factors of production.

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Definitions:

Financial Institution

An establishment that conducts financial transactions such as investments, loans, and deposits.

Provincial Governments

The governing authorities of regions or provinces within a country, responsible for administering regional laws and policies.

Trust Companies

Financial institutions that act as agents for a trust to manage assets, execute trusts, and administer estates on behalf of their beneficiaries.

Agency Problems

Conflicts of interest between the principals (owners or shareholders) and agents (managers) of a company, often arising from differing motives or information asymmetry.