-Refer to Exhibit 5-1

question 32

Multiple Choice

-Refer to Exhibit 5-1. Which demand curve is perfectly inelastic?

• A) (a)
• B) (b)
• C) (c)

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Definitions:

Factor Market

A market where factors of production (such as labor, capital, and land) are bought and sold, different from markets for goods and services.

Marginal Productivity Theory

An economic theory that explains the determination of wages in the factor market, based on the productivity of the marginal unit of labor or other factors of production.

Human Capital

The collective skills, knowledge, or other intangible assets of individuals that can be used to create economic value.

Compensation of Employees

Payments and benefits received by employees in exchange for their labor, including wages, salaries, and benefits such as health insurance.