What does it mean to say that we are running out of "cheap oil"? What does this imply for the price of oil in the future?
What will be an ideal response?
To say that we are running out of "cheap oil" means that much of the oil that is needed to meet the demand for oil in the future is relatively expensive to find and extract. This suggests that the price of oil will increase in the future. There is an enormous amount of oil under the surface of the earth, but for firms to profitably drill for oil, the price of oil needs to be high enough to pay for the costs of drilling.
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Which of the following is a macroeconomic decision or concept?
A) the price of oil B) how many television sets to produce C) the unemployment rate for the entire economy D) the unemployment rate for each firm
Which of the following is NOT a reason that free trade stimulates economic growth?
A) Free trade encourages a more rapid spread of technology. B) Industries have larger markets. C) The importation of technically advanced products enables the country to imitate the technology. D) Free trade keeps domestic prices up, enabling firms to make more profits that can be spent on research and development.