Derived Demand Means That the Demand for a Factor of Production

question 139

Multiple Choice

Derived demand means that the demand for a factor of production is derived from the

• A) supply of that factor of production.
• B) price of that factor of production.
• C) demand for the goods and services the factor of production is used to produce.
• D) costs of production.
• E) government, which forces large firms to hire at least some minimum number of different resources.

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Definitions:

Transitive Preferences

In decision-making, the condition where if an individual prefers option A to option B and option B to option C, then they also prefer option A to option C.

Majority Rule

A decision-making rule in which the preferences of more than half of the members in a group have authority over decisions.

Transitivity Property

is a mathematical concept applied in various fields, indicating that if relation A is related to B, and B is related to C, then A is necessarily related to C.

Adverse Selection

A scenario where information asymmetry results in high-risk individuals being more likely to engage in agreements, negatively affecting the other party.