Next year's expected price of oil is $88 per barrel and the interest rate is 10 percent per year. According to the Hotelling Principle the price of oil this year is
A) $80 per barrel.
B) $88 per barrel.
C) $96 per barrel.
D) None of the above answer is correct.
A
You might also like to view...
Supply-side economists argue that less government spending will
a. result in less economic stabilization b. result in more crowding out c. lower both rates of unemployment and inflation d. lower the interest rate and lower private investment e. lower the interest rate and raise private investment
A dominant strategy is
A) an equilibrium where each firm chooses the best strategy, given the strategies of other firms. B) a strategy chosen by two firms that decide to charge the same price or otherwise not to compete. C) a strategy that is obviously the best for each firm that is a party to a business decision. D) a strategy that is the best for a firm no matter what strategies other firms use.
Refer to Table 3-3. The table above shows the demand schedules for Kona coffee of two individuals (Luke and Ravi) and the rest of the market. At a price of $4, the quantity demanded in the market would be
A) 40 lbs. B) 70 lbs. C) 110 lbs. D) 150 lbs.
The resources that a taxpayer devotes to complying with the tax laws are a type of
a. consumption tax. b. value-added tax. c. deadweight loss. d. producer surplus.