Which of the following is bought and sold in factor markets?

• A. Labor services
• B. Finished consumer goods
• C. Advertising services
• D. Government bonds

Answer: (A)

Verified step by step guidance

1. Understand the definition of factor markets: Factor markets are markets where factors of production (such as labor, land, and capital) are bought and sold. These markets deal with inputs used to produce goods and services.
2. Identify the options given: Labor services, Finished consumer goods, Advertising services, and Government bonds.
3. Classify each option: Finished consumer goods are final products sold in product markets, not factor markets. Advertising services are services provided to promote goods, also part of product or service markets. Government bonds are financial instruments traded in financial markets, not factor markets.
4. Recognize that labor services represent the work and effort provided by workers, which is a classic example of a factor of production bought and sold in factor markets.
5. Conclude that among the options, labor services are the correct choice for what is bought and sold in factor markets.