Explain how continuing technical progress may cause the price of scarce, exhaustible resources to fall over time
What will be an ideal response?
Technical progress can lower the extraction cost of exhaustible resources. This decrease in extraction costs can offset the increase in price due to the positive interest rate. This may result in lower resource prices over time.
You might also like to view...
For a perfectly competitive firm, at profit maximization
A) production must occur where average cost is minimized. B) market price exceeds marginal cost. C) total revenue is maximized. D) marginal revenue equals marginal cost.
Which of the following statements is the MOST accurate? In general
A) the monetary approach to the exchange rate is a long run theory. B) the monetary approach to the exchange rate is a short run theory. C) the monetary approach to the exchange rate is both a short and long run theory. D) the monetary approach to the exchange rate neither long run nor short run theory. E) the monetary approach to the exchange rate is considered less practical than the law of one price.