As the price of a resource increases,_____
A)the demand for that resource increases in the resource market.
B)the supply of that resource decreases in the resource market.
C)resources shift from lower-paid uses to higher-paid uses.
D)resources shift from higher-paid uses to lower-paid uses.
E)the demand for the final product decreases.

Question

Quizplus · Accepted Answer

When the price of a resource increases, it becomes more profitable to use that resource in higher-paid uses, and less profitable to use it in lower-paid uses. Therefore, resources will shift from lower-paid uses to higher-paid uses. This will eventually lead to an increase in the supply of goods that use the resource and a decrease in the demand for the final product.

As the Price of a Resource Increases,_____