Suppose coal sells for $50 per ton and can be mined at a constant marginal cost of $20 per ton. Forecasters predict that the price of coal next year will be $55
If your marginal cost next year will still be $20 and the interest rate is 10%, do you sell coal today?
You are indifferent if coal prices rise (10% of 50 - 20 ) by $3. Since coal prices are expected to rise by $5, you will wait until next year.
Economics
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Monetarists argue that an exogenous fall in investment spending leads to
A) declining real output. B) declining money supply. C) declining velocity. D) declining interest rates.
Economics
Which of the following will lead to an outward shift in the firm's short-run demand for labor?
A) an increase in the price of output B) less capital per unit of labor C) a decline in labor productivity D) a reduction in average consumer income
Economics