Predictions of severe shortages due to impending natural resource depletion
a. are widely accepted by resource economists even though such predictions are a relatively new occurrence.
b. have been wrong in the past, but most resource economists believe that the threat of resource depletion is now far more severe than ever before.
c. are typically made without adequate recognition and consideration of resource price elasticities.
d. typically assume that price elasticities are greater than they really are.
C
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Jenny likes chocolates. One day, a friend offers her a chocolate bar and she is extremely happy on receiving it. As the day progresses, many other people also buy her chocolate
As she gets more and more chocolates, her excitement on receiving each bar is seen to gradually lessen. Which economic principle is reflected in this example? A) The Law of Increasing Willingness to Pay B) Aggregation of demand behavior C) The Law of Diminishing Marginal Benefit D) The Law of Equi-Marginal Utility
According to the Taylor rule, if the inflation rate in the last year was 2% and output was equal to its full-employment level, the nominal Fed funds rate should be
A) 3%. B) 4%. C) 5%. D) 6%.