When Resource Markets Are Free to Adjust, Temporary Differentials Will

question 115

Multiple Choice

When resource markets are free to adjust, temporary differentials will cause

• A)b, c, and e to occur
• B)the allocation of fewer resources to lower-paid uses
• C)the equalization of payments for the same resource in different uses
• D)no change in the allocation of resources
• E)the allocation of more resources to higher-paid uses

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Definitions:

Signal-Detection

The theory and method of differentiating between information-bearing patterns and random patterns that distract from the information.

Fechner's Law

A principle describing the logarithmic relationship between stimulus magnitude and perceptual intensity, suggesting that sensation increases as the logarithm of the stimulus intensity.

Weber's Law

A principle stating that the smallest perceptible change in a stimulus, or the just noticeable difference, is a constant proportion of the original stimulus.

Sensory Adaptation

The process by which sensory receptors become less sensitive to constant stimuli over time, reducing our awareness of them.