Which of the following statements best illustrates the relationship between the market for products and the market for resources?
a. An increase in the price of cameras will decrease the demand for film.
b. As income rises, people demand relatively smaller amounts of food.
c. An increase in the demand for textiles will increase the demand for textile workers.
d. An increase in the price of butter will cause more people to buy margarine.
e. A decrease in the demand for tea will increase the demand for coffee.
c
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Assume toys are produced using only labor and wood. Which of the following best describes the cost of producing toys?
a. The number of dollars that the laborer spends to purchase the wood. b. The amounts of labor and wood used in the production process. c. The alternative uses that could be found for the labor and wood. d. The monetary value of the labor and wood used.
Refer to Figure 11-11. For output rates greater than 20,000 picture frames per month
A) the firm will not make a profit because the average cost of production will be too high. B) the firm will experience diminishing returns. C) the short-run average total cost will equal the long-run average total cost of production. D) the firm will experience diseconomies of scale.
The replacement of older products by newer improved ones is called
a. trickle-down economic growth. b. creative destruction. c. economies of scale. d. planned obsolescence.
Changes in the stocks of finished goods and goods in process as well as changes in the raw materials that businesses keep on hand is known as
A. fixed investment. B. inventory investment. C. the income approach. D. the expenditure approach.