The Demand for Any Factor of Production in a Competitive

question 67

Multiple Choice

The demand for any factor of production in a competitive industry depends on

• A) its productivity and upon the value of its output in the marketplace.
• B) its productivity and the productivity of all other inputs.
• C) the productivity of all the other inputs and how these inputs are valued in the marketplace.
• D) the amount of the factor that is used and the amounts of all the other factors that are used.

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Definitions:

Depletion

An accounting method used to allocate the cost of extracting natural resources over the period of their extraction.

Depreciation

A method of allocating the cost of a tangible asset over its useful life.

Total Depreciation Expense

The cumulative amount of an asset's cost that has been allocated as expense due to wear and tear over its useful life.

Land Improvements

Enhancements to a plot of land such as landscaping, parking lots, and underground utilities that increase the property's value.