Suppose an exhaustible resource can be sold only this period or in the next period. The marginal cost of extraction is constant and equal to $5. The current year price of the resource is $55, respectively. The interest rate is 10%. What is the minimum next year price required to make the sale of the resource profitable next year?

Which of the following is a normative question about an initiative to impose a new tax?

A.All of the above are normative considerations. B. What is the expected impact on producers and consumers? C. How much revenue is the tax expected to raise? D. Is the tax considered to be in the public interest?

When diminishing marginal returns set in, total product will

A) increase at an increasing speed. B) increase at a decreasing speed. C) decrease at an increasing speed. D) decrease at a decreasing speed.