Suppose coal sells for $50 per ton and can be mined at a constant marginal cost of $20 per ton. Forecasters predict that the price of coal next year will be $55
If your marginal cost next year will still be $20 and the interest rate is 10%, do you sell coal today?
You are indifferent if coal prices rise (10% of 50 - 20 ) by $3. Since coal prices are expected to rise by $5, you will wait until next year.
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A streetlight is a
a. private good. b. club good. c. common resource. d. public good.
Suppose that policymakers are doing cost-benefit analysis on a proposal to add traffic barriers to divide the flow of traffic in an effort to increase safety on a given highway. Which of the following statements is correct?
a. The benefits are usually easier to measure than the costs. b. Because human life is priceless, any measure to increase traffic safety would generate benefits that outweigh the costs. c. Estimating the value of a human life is difficult but necessary to evaluate the proposal. d. Both a and b are correct.
Suppose that 2 per cent of the employed lose their jobs each month (s = 0.02) and 38 per cent of the unemployed find a job each month (f = 0.38). Then, the steady-state rate of unemployment is:
A. 2 percent. B. 5 per cent. C. 16 per cent. D. 36 per cent.
In the early 2000s car sales in China had slowed in part caused by the government's actions to limit businesses from lending funds to consumers. Assuming the car market in China can be analyzed with demand and supply curves, what best reflects the change in the market?
A. Supply curve shifts to the left with no change in demand. B. Demand curve shifts to the left with no change in supply. C. Both the supply and demand curves shift to the left. D. Both the supply and demand curves shift to the right.