Permanent Differentials in Resource Prices Will Cause _____

question 41

Multiple Choice

Permanent differentials in resource prices will cause _____

• A)a change in the supply of resources.
• 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:

Economies of Scale

The cost advantage that arises with increased output of a product due to spreading fixed costs over more units of production.

Minimum Efficient Scale

The smallest level of production a firm can achieve while still taking full advantage of economies of scale regarding costs per unit.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, leading to a reduction in average costs with increased output.