Economic profits and losses are true market signals because they
A) convey information in an asymmetrical fashion.
B) convey information about rewards people should anticipate experiencing by shifting resources from one activity to another.
C) convey information to public officials about where to encourage people to invest and what skills people should develop.
D) cause people to move into careers in both undesirable and desirable industries with equal ease.
Ans: B) convey information about rewards people should anticipate experiencing by shifting resources from one activity to another.
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The trends displayed in the table can best be explained by
A) service industries have increased as a proportion of the economy and they tend to have higher nominal wage rates. B) the inflation rate has been rising over the time period. C) the real wage rate has increased at a rate about equal to the inflation rate. D) the nominal wage rate has increased at a rate about equal to the inflation rate. E) None of the above can explain the trends in the figure.
What do economists mean when they say that a firm's plant is fixed?
What will be an ideal response?