A temporary resource price differential refers to a price difference
A)that will not lead to a shift of resources among users
B)caused by lack of resource mobility
C)caused by economic rent
D)that, for example, causes more workers to move to higher-paid areas
E)caused by minimum wage legislation

Question

Quizplus · Accepted Answer

A temporary resource price differential can cause a shift of resources among users, such as workers moving to higher-paid areas. This is because the differential represents a temporary imbalance in the supply and demand for resources, which creates an opportunity for individuals or firms to earn higher profits or wages by reallocating their resources to the more profitable or higher-paying uses. The other choices are not relevant to the concept of temporary resource price differentials.

A Temporary Resource Price Differential Refers to a Price Difference