Entry Exam Category: High School Equivalency Exams
Course: General Education Development (GED)
Exam: GED Social Studies Practice Test
Practice Question
Extract
Markets
The interaction between the buyers and sellers of a good or service is called a market. Two important economic markets are factor markets and product markets.
The factor market refers to the buying and selling of the factors of production. The factors of production (land, labor, capital, and entrepreneurship) are the resources used to produce goods and services.
Producers offer goods and services for sale in product markets. Individuals spend the money they have earned in the factor market (for instance, wages or the income from selling land) to make purchases in product markets.
The interaction between the buyers and sellers of a good or service is called a market. Two important economic markets are factor markets and product markets.
The factor market refers to the buying and selling of the factors of production. The factors of production (land, labor, capital, and entrepreneurship) are the resources used to produce goods and services.
Producers offer goods and services for sale in product markets. Individuals spend the money they have earned in the factor market (for instance, wages or the income from selling land) to make purchases in product markets.
Which statement is based on the text?
Answer Choices
- A: Individuals spend their income in factor markets.
- B: Entrepreneurs profit from participation in product markets.
- C: Individuals sell their labor in factor markets.
- D: Resources are traded in product markets.
Correct Answer: C
Rationale: Text states factor markets involve selling factors like labor