What determines the supply of a nonrenewable natural resource?
What will be an ideal response?
The supply of a nonrenewable natural resource depends on the total known amount, such as the known oil reserves in the market for oil. It also depends on the scale of current production facilities, which determines the marginal cost of producing the resource. For instance, when more oil wells are sunk, the supply of oil increases. The expected future price also affects the supply. The higher the future expected price, the smaller the present supply of the resource.
You might also like to view...
If real GDP grows by 3 percent, the velocity of circulation does not change, and the quantity of money grows by 5 percent, then in the long run the inflation rate is
A) 8 percent. B) -5 percent. C) 2 percent. D) 3 percent. E) -2 percent.
To calculate GDP using the expenditure approach, in part it is necessary to
A) add imports and exports. B) add imports and subtract exports. C) add exports and subtract imports. D) subtract both exports and imports.
Compare and contrast the concepts of income and wealth. Are these measured as a stock or a flow? Explain
What will be an ideal response?
Someone who is risk-neutral has
A) diminishing marginal utility of wealth. B) constant marginal utility of wealth. C) increasing marginal utility of wealth. D) less marginal utility of wealth than someone who is risk-preferring.