A change in the market demand of 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

A change in the market demand of 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.

Quizplus · Accepted Answer

A change in market demand of a final good will affect the demand for the resources used to produce it. If the demand of a final good increases, the demand for the resources used to produce that good will also increase. Similarly, if demand for a final good decreases, the demand for the resources used to produce that good will decrease. However, it will not affect the supply of the resources or the marginal product of the resources used to produce it. It may affect the marginal resource cost and total cost, but these are not direct consequences of a change in market demand of a final good.

A Change in the Market Demand of a Final Good