According to the Hotelling Rule, the price of an exhaustible natural resource will
a) be very volatile
b) rise at the rate of interest
c) be too low and result in to being exploited too quickly
d) rise to ensure that the resource never runs out.
e) Always be at the backstop price where rival sources are economic
b) rise at the rate of interest
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Which one of the following statements is NOT true?
A) The classical model assumes that people suffer from money illusion. B) The classical model assumes that no single seller of a commodity can affect its price. C) The classical model assumes that pure competition exists. D) The classical model assumes that people are motivated by self-interest.
If the marginal cost of producing vanity license plates is virtually zero (by prison inmates with little else to do), then states would maximize their profits on plate sales at the point on a linear demand curve where
A. demand is inelastic. B. demand is elastic. C. demand is unit elastic. D. the demand curve crosses the horizontal axis.
In the long run,
a. monopolies will not incur economic losses b. the demand curve facing the firm is horizontal under monopoly c. economic profit and loss determines entry and exit into monopoly markets d. competition always destroys monopoly e. government always regulates monopoly
If a general partnership fails, who is responsible for the debts?
a. anyone who works for the partnership b. all the partners c. only the most senior general partner d. no one