ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Markets where firms SELL goods & services that they produce to households.
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Markets where firms BUY resources they need to produce goods & services.
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Either A or B
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None of the above
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Detailed explanation-1: -"Factor market” is a term economists use for all of the resources that businesses use to purchase, rent, or hire what they need in order to produce goods or services. Those needs are the factors of production, which include raw materials, land, labor, and capital. The factor market is also called the input market.
Detailed explanation-2: -Land, labor, and capital are found in traditional factor markets. Factor demand is a derived demand. Land, labour, capital, and entrepreneurship markets are examples of factor markets.
Detailed explanation-3: -Factor Market vs Product Market The product market is where goods and services are sold and bought, while the factor market is where different factors of production like land, capital, and labor are bought and sold.
Detailed explanation-4: -In the factor market, the firms are the buyers, and in the market for goods and services, the firms are the sellers, or suppliers. Households own the factors of production but are buyers and consumers of goods and services.
Detailed explanation-5: -The factor market-sometimes called the input market-is where a business buys its factors of production, which are the resources used to produce the goods or services it sells. They include labor, capital, land, and entrepreneurial talent.