The More Inelastic the Demand for a Resource, the

question 51

Multiple Choice

The more inelastic the demand for a resource, the

• A) less elastic its marginal revenue product curve.
• B) more elastic its marginal revenue product curve.
• C) greater the potential for resource substitution.
• D) greater the productivity of the resource.

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Definitions:

Marginal Productivity Theory

An economic theory suggesting that payment to factors of production equals the value of their marginal contribution to the production process.

Equilibrium Value

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market.

Factor Of Production

Inputs employed in the production of goods and services, typically classified as land, labor, capital, and occasionally entrepreneurship.

Average Product

The output per unit of input, such as labor or capital, used in the production process.