Which term best completes the sentence: 'A ___ can be defined as whatever people use to create services and goods.'?

• A. factor of production
• B. consumer surplus
• C. market equilibrium
• D. opportunity cost

Answer: (A)

Verified step by step guidance

1. Understand the sentence: 'A ___ can be defined as whatever people use to create services and goods.' This sentence is asking for a term that describes the inputs used in the production process.
2. Recall the definitions of the given options: 'factor of production' refers to resources used to produce goods and services; 'consumer surplus' is the difference between what consumers are willing to pay and what they actually pay; 'market equilibrium' is the point where supply equals demand; 'opportunity cost' is the value of the next best alternative foregone.
3. Identify which term relates directly to inputs in production. Since 'factor of production' means resources like labor, capital, land, and entrepreneurship used to create goods and services, it fits the sentence best.
4. Confirm that the other options do not fit the definition: consumer surplus, market equilibrium, and opportunity cost relate to different economic concepts, not the inputs for production.
5. Conclude that the correct term to complete the sentence is 'factor of production' because it precisely defines what is used to create goods and services.