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RESOURCE PRICES: One of the five supply determinants assumed constant when a supply curve is constructed, and that shift the supply curve when they change. The other four are technology, other prices, sellers' expectations, and number of sellers. Resource prices, the prices paid to use the factors of production (labor, capital, land, and entrepreneurship) affect production cost and thus producers' ability to sell goods. In general, if sellers face higher resource prices, then they have less ABILITY to sell goods.

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SIGNALLING

When confronted by asymmetric information, the use of small bits of information, or indicators, that suggest more comprehensive information. Signalling is used by those with more information to reduce the cost of informing those with less information. It is commonly used in markets with adverse selection. Methods of signalling include advertising, brand names, and warranties. A related method is screening.

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Today, you are likely to spend a great deal of time wandering around the downtown area wanting to buy either a how-to book on meeting people or clothing for your pet iguana. Be on the lookout for cardboard boxes.
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Three-forths of the gold mined each year is used to manufacture jewelry.
"Nothing so conclusively proves a man's ability to lead others as what he does from day to day to lead himself."

-- Thomas J. Watson, IBM founder

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