Consider Two Resource Markets in Which the Demand Curves Slope

question 83

Multiple Choice

Consider two resource markets in which the demand curves slope downward.In market A, the supply curve is horizontal, equilibrium price is $6, and 100 units of the resource are hired.In market B, the supply curve is vertical, equilibrium price is $20, and 30 units of the resource are hired.Which of the following is true?

• A)All of the resource earnings in market A are economic rent.
• B)All of the resource earnings in both markets are economic rent.
• C)All of the resource earnings in market B are economic rent.
• D)None of the resource earnings in either market is an opportunity cost.
• E)None of the resource earnings in either market is economic rent.

Understand the definitions and implications of Type I and Type II errors in hypothesis testing.

Identify the symbols (α and β) that represent the probabilities of Type I and Type II errors, respectively.

Comprehend the concept and formulation of null and alternative hypotheses.

Distinguish between the decision outcomes in hypothesis testing (true positive, true negative, false positive, false negative).

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Definitions:

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