If an Increase in the Use of One Factor of Production

question 7

Multiple Choice

If an increase in the use of one factor of production lowers the demand for the other, the two factors are:

• A) normal factors of production.
• B) substitute factors of production.
• C) inferior factors of production.
• D) complementary factors of production.

---

Definitions:

Unemployment Levels

The proportion of the labor force that is jobless and actively seeking employment.

Price Level

An indication of the average prices of goods and services in an economy at a specific time, often used to measure inflation.

Nominal Wages

The amount of money paid to an employee before adjustments for factors like inflation, not reflecting the real purchasing power of the income.

Real Wages

Wages adjusted for inflation, representing the actual purchasing power of income received by workers.