Which of the following is a prediction that can be made using demographic data in economics?

• A. Determining the price elasticity of supply for a specific good
• B. Forecasting future labor market trends
• C. Measuring the opportunity cost of capital investment
• D. Calculating the marginal cost of production

Answer: (B)

Verified step by step guidance

1. Step 1: Understand what demographic data represents. Demographic data includes information about the characteristics of a population, such as age, gender, income, education, and employment status.
2. Step 2: Recognize that demographic data is primarily used to analyze and predict trends related to populations, such as labor force participation, consumer behavior, and economic growth patterns.
3. Step 3: Evaluate each option in the problem to see which one logically connects to demographic data:
4. - Price elasticity of supply relates to how quantity supplied changes with price, which depends more on market conditions and production technology than demographics.
5. - Forecasting future labor market trends directly involves demographic data because labor supply depends on population characteristics like age distribution and education levels.
6. - Measuring opportunity cost of capital investment is a financial decision concept, not directly linked to demographic data.
7. - Calculating marginal cost of production involves cost changes from producing one more unit, which is related to production technology and input costs, not demographics.
8. Step 4: Conclude that the prediction most closely related to demographic data is forecasting future labor market trends, as it uses population characteristics to anticipate changes in labor supply and demand.