What is the Hotelling Principle? Have resource prices behaved as the principle predicts?
What will be an ideal response?
The Hotelling Principle states that the price of a nonrenewable natural resource will rise at a rate equal to the interest rate. In reality, resource prices have not behaved this way. In addition to interest rates, technology and cost of extracting the resources affect the price of resources and so in reality, the prices of nonrenewable natural resources have generally fallen during some past years and risen during others.
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Which of the following would be classified as a fixed cost for the proprietor who owns and operates the local Texaco station?
A) the federal excise tax paid on each gallon of Texaco gasoline sold B) the state income tax on the profit earned C) the rent paid on the 10 year lease for the property on which the station is located D) the Social Security tax the owner pays the federal government on the owner's income
For how long must most hedge fund investors wait before withdrawing funds?
A) 1 to 3 days B) 1 to 3 weeks C) 1 to 3 months D) 1 to 3 years
The income approach to calculating GDP:
A. is more accurate than using the expenditure approach. B. is less accurate than using the expenditure approach. C. will generate the same answer as using the expenditure approach. D. is simpler to calculate than the expenditure approach.
When the quantity demanded of labor exceeds the quantity of labor supplied, the market wage rate is
a. below equilibrium b. above equilibrium c. at its equilibrium level d. equal to the workers' MRP e. equal to the workers' opportunity cost