The demand for labor and other factors of production typically decline in a recession because those factors
A. Are derived from the demand for final output, which also declines in a recession.
B. Are no longer offered for sale in factor markets.
C. Have become more expensive than before the recession.
D. Have become relatively scarcer than before the recession.
Answer: A
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Suppose a shortage for good X exists. Given this information, we know that
A) the price of good X will tend to rise toward the equilibrium level. B) the price of good X will tend to fall toward the equilibrium level. C) a government price floor should be imposed above the current price so that the market can work more effectively. D) a government price ceiling should be imposed above the current price so that the market can work more effectively.
The buyers and sellers who trade a particular good or service make up what we call a:
A. market. B. store. C. mall. D. negotiators.