Suppose an exhaustible resource can be sold only this period or next period. The resource owner is considering selling 100 tons of the resource this period. The future value of the resource when 100 tons are sold this period is less than the present value of the 100 tons sold this period multiplied by one plus the interest rate. What should the resource owner do?
A) She should sell more than 100 tons this period.
B) She should sell only 100 tons this period.
C) She should sell less than 100 tons this period.
D) She should not sell any of the resource in either period.
A
Economics
You might also like to view...
When the current price of an item is greater than the item's market clearing price
A) supply is greater than demand. B) demand is greater than supply. C) quantity supplied is greater than quantity demanded. D) quantity supplied is less than quantity demanded.
Economics
If the marginal propensity to consume is 0.75, net taxes are fixed at $2,000 and real income rises by $12,000 . by how much will real consumption spending increase?
a. $9,000 b. $8,000 c. $7,500 d. $7,000 e. $10,000
Economics