Consider Industries X and Y

question 19

Multiple Choice

Consider industries X and Y. Industry X has total revenue of $100 million and total costs of $77 million. Industry Y has total revenue of $80 million and total costs of $40 million. We should expect that:

• A) prices are higher in Industry X.
• B) resources will move from Industry Y to Industry X.
• C) labor and capital will move from Industry X to Industry Y.
• D) firms in both industries will shut down operations.

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Definitions:

Unconditioned Stimulus

A stimulus that naturally and automatically triggers an unconditioned response without prior conditioning.

Conditioned Response

A learned reaction to a previously neutral stimulus that has become associated with an unconditioned stimulus through classical conditioning.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without prior learning or conditioning.

Sour Pickles

A type of food preserved in a solution of vinegar or brine, characterized by its sour taste.