Question

2. Any place where factors of production are bought and sold is a:

A. Private-goods market.
B. Stock market.
C. Product market.
D. Factor market.

Answer 1

D. Factor market. The factor market is where the factors of production (land, labor, capital, and entrepreneurship) are bought and sold. This includes the hiring of workers, the renting of land, the leasing of capital, and the borrowing of funds. In contrast, the product market is where finished goods and services are bought and sold. Therefore, option D is the correct answer.