Suppose an exhaustible resource can be sold only this period or in the next period. The marginal cost of extraction is constant and equal to $2. The current and next year prices of the resource are $12 and $13, respectively. At what interest rate the owner of the resource will be indifferent between selling it today or in the next period?
A) 5%
B) 7.5%
C) 10%
D) 12.5%
C
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Describe the difference between social interest theory of regulation and the capture theory of regulation
What will be an ideal response?
The United States is a member of the fast-growth club of economic convergence, and India is a member of the slow-growth club of economic convergence.
Select whether the statement is true or false. A. True B. False
If society allows firms to freely pollute the environment, then which of the following is true?
a. Market equilibrium output will be equivalent to the efficient output level. b. Market equilibrium output will be too low relative to the efficient output level. c. Market equilibrium output will be too high relative to the efficient output level. d. The efficient output level can be achieved by giving firms a subsidy for the pollution they generate.
Moe divides his time between studying Physics and studying Economics. His production possibilities curve for his final grade in each class is shown in the accompanying figure.
Which of the following is true?
A. Moe has a comparative advantage in economics. B. Moe has an absolute advantage in economics. C. Moe's opportunity cost of studying for each subject is increasing. D. Moe has a comparative advantage in physics.