Explain what is meant by "derived demand" as it relates to factors of production
The demand for a factor of production is derived from the underlying demand for the final good or service, which the factor helps produce. A firm wishes to employ the factor for what the factor will add to the profitability of the firm. Therefore an increase in the price of the final good or service, which increases the profitability of production, will also lead to an increase in demand for factors.
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
In the above figure, using the slope across an arc, the slope of the curve between points a and c is
A) 3/5. B) 5/3. C) -3/5. D) -5/3.
Explain the difference between financing investment with a business loan versus with venture capital. What are the pros and cons of each?
What will be an ideal response?
Private goods are nonexclusive goods
Indicate whether the statement is true or false