Which of the Following Best Illustrates How Resources Move from Low-Value

question 139

Multiple Choice

Which of the following best illustrates how resources move from low-value industries to high-value industries in competitive markets?

• A) Entrepreneurs will always find the market in which price is the highest and increase production in it.
• B) The invisible hand will always equate prices in the long run.
• C) Entrepreneurs will move production from low-profit industries to high-profit industries.
• D) Firms will always be able to recognize high- and low- value industries simply by looking at their costs of production.

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Definitions:

Pizza

A popular dish of Italian origin, consisting of a round, flattened base of leavened wheat-based dough topped with tomatoes, cheese, and various other ingredients, baked at a high temperature.

Books

Bound printed works consisting of written or illustrated pages, typically used for reading or study.

Weak Axiom

A concept in consumer theory that assumes if a consumer prefers a bundle A over bundle B when prices are unchanged, they will not prefer B over A if the price of A decreases and B remains the same or increases.

Revealed Preference

An economic theory that assumes consumers' preferences can be revealed by their purchasing habits.