A change in the market demand for a final good affects _____
A)the supply of the resources used to produce it.
B)the demand for the resources used to produce it.
C)the marginal product of the resources used to produce it.
D)the marginal resource cost of the resources used to produce it.
E)the total cost of the resources used to produce it.

Question

Quizplus · Accepted Answer

A change in market demand for a final good would affect the demand for the resources used to produce it. As demand for the final good increases, firms must increase their production, increasing the demand for the resources (labor, capital, land, etc.) used to produce it. Conversely, a decrease in demand for the final good would decrease the demand for resources used to produce it.

A Change in the Market Demand for a Final Good