Markets for Factors of Production Are Different from Product Markets

question 21

Multiple Choice

Markets for factors of production are different from product markets in an important way because:

• A) the demand for a factor of production is likely to be upward-sloping, in violation of the law of demand.
• B) equilibrium is the exception, and not the rule, in factor markets.
• C) the demand for a factor of production is a derived demand.
• D) the supply-demand characteristics of product markets are not applicable to factor markets.
• E) product markets derive their demand from factor markets.