Answer the following statements true (T) or false (F)
1. In the extraction of a nonrenewable resource such as coal, the mining firm faces "user costs"
which refer to the cost of digging out the coal, running the mine, and transporting the coal.
2. If resource extraction companies can benefit from both present and future extraction, they will
limit current extraction to only those units which are more profitable to extract in the present
rather than in the future.
3. Definition of property rights is a key component to proper conservation of resources.
4. In the case of conflict diamonds, the strict enforcement of property rights has lead to too fast of
a rate of extraction.
5. The price of harvesting a renewable resource does not affect when or how much of a
renewable resource will be harvested.
1. FALSE
2. TRUE
3. TRUE
4. FALSE
5. FALSE
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A consumer who chooses the optimal bundle will go to a point on the highest attainable indifference curve.
Answer the following statement true (T) or false (F)
In the U.S., one example of a cartel that is legal is
A) the railroads, including Union Pacific. B) the oil industry. C) Major League Baseball. D) None, all cartels are prohibited.
Which of the following is a characteristic of a perfectly competitive market?
A. A few large firms B. Firms producing specialized products in order to attract consumers C. Each individual firm having some control over the market price D. A large number of small firms
How do modern markets differ from other economic systems in their capacity to produce “growth miracles”?
What will be an ideal response?