A Change in a Factor's Price Will Have a Greater

question 219

Multiple Choice

A change in a factor's price will have a greater effect on the quantity of the factor demanded the

• A) smaller the change in the factor's price.
• B) smaller the factor's share of total cost of production.
• C) more elastic is the demand for the product the factor helps to make.
• D) more inelastic is the demand for the product the factor helps to make.

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Definitions:

Adverse Selection

A situation in consumer choice in which asymmetric information leads to the selection of undesirable alternatives by one party.

Fire Insurance

A type of property insurance that covers damage and losses caused by fire, providing compensation to policy holders for the repair or replacement of affected property.

Low-risk

Refers to investments or economic decisions that have a low probability of resulting in financial loss.

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