The producers of good X are earning (positive) economic profits and the producers of good Z are receiving economic losses. A likely consequence is that (in time) resources will be shifted out of producing good Z and into producing good X. Here profit and loss are most closely serving as
A) signals-telling entrepreneurs where resources should be moved.
B) signals-telling entrepreneurs who is a success and who isn't.
C) an accounting device-observed by those who have to pay taxes and those who do not have to pay taxes.
D) signals-telling tax collectors from whom to collect taxes and from whom not to collect taxes.
Correct Answer:
Verified
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