Price Is Information Signaling How Much Potential Value May Be

question 103

True/False

Price is information signaling how much potential value may be derived from consuming something.

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Definitions:

Wage Differentials

The differences in wage rates due to the variations in the skill level, occupation, region, and other factors affecting compensation.

Diminishing Returns

The principle stating that as one factor of production is increased while others are held constant, a point will eventually be reached where additions of the factor yield progressively smaller increases in output.

Value Added

The increase in worth of a product or service as a result of a particular stage of production or as it moves through the supply chain.

Marginal Product

The increase in output resulting from a one-unit increase in the amount of a single input used, keeping all other inputs constant.