All else equal, if oil prices decrease, annual oil consumption will ________ and the years it will take to deplete the stock of oil will most likely ________
A) decrease; increase.
B) decrease; decrease
C) increase; increase
D) increase; decrease
D
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An economic variable that is measured per unit of time, such as spending per year, is known as a: a. stock variable
b. periodic variable. c. dummy variable. d. flow variable. e. controlled variable.
Critics of price regulation suggest that some firms
A. will lack the incentive to run their business efficiently. B. will underestimate their costs and lead to bankruptcy. C. will sue the federal government for damages. D. will set their price equal to marginal cost instead of average cost.
The economy was in long-run equilibrium when aggregate demand increased. At this point in time, the expected inflation has started to adjust to the new higher actual inflation rate. According to the (Friedman) natural rate theory, this means the unemployment rate in the economy must currently be
A) decreasing. B) increasing. C) higher than it was in long-run equilibrium. D) equal to what it was in long-run equilibrium. E) There is not enough information to answer the question.
The downside to targeting specific activities rather than the externality itself is:
A. any one activity is likely to not make a significant difference in the presence of an externality. B. it risks misaligning the incentives that producers and consumers face with the goal of minimizing the externality. C. it requires a number of different activities to be identified and several different policies to be written, which can be cumbersome and difficult to manage. D. All of these statements are true.