Suppose you are deciding how much oil to pump from your oil well in the next two years. Other things equal, you will be more likely to pump more oil this year than next year if you expect
A. a lower price for oil this year than next year.
B. a higher price for oil this year than next year.
C. less demand for oil next year than this year.
D. the same price of oil this year than next year.
Answer: B
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As the price of computers falls, the quantity of computers demanded increases. This is an application of:
A. the production possibilities curve B. the law of demand C. the law of supply D. needs versus wants
A cartel is a collusive agreement among a number of firms that is designed to
A) expand output and lower prices but not to a predatory level. B) restrict output and lower prices to a predatory level. C) restrict output and raise prices. D) expand output and raise prices. E) expand output and lower prices to a predatory level.
If the market price faced by a perfectly competitive firm increases, in the short run how does the firm respond?
What will be an ideal response?
In the two-period model with limited commitment, if the collateral constraint binds
A) increases in the present value of collateral increase current consumption and reduce future consumption. B) increases in the present value of collateral increase current consumption one-for-one. C) increases in the present value of collateral decrease current consumption and increase future consumption. D) increases in the present value of collateral increase current consumption less than one-for-one.