As suppliers and potential suppliers of exhaustible resources continually calculate whether to extract now or in future, and how much to extract, an equilibrium arises when:
a. the cost of extracting such resources is equal to its price.
b. the rate of return for such resources equals the rate of interest on alternative uses of the funds.
c. the cost of extracting such resources is equal to the price of the commodity using these resources.
d. the price of such resources is equal to the rate of interest of bank accounts and other interest-bearing investments.
e. the rate of return on alternative investments is equal to the cost of extracting such resources.
b
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Members of the Food and Drug Administration (FDA) will tend to require more testing of proposed new drugs than is best from the point of view of people who use the drugs, because FDA members
A) identify themselves with the drug industry. B) have the technical knowledge to decide what is best for the users of drugs. C) are blamed if new drugs turn out to have damaging side effects but are not blamed for the lives lost or discomfort suffered because new drugs were not available sooner. D) pay for the testing from their own budget and consequently can do as they please.
The money supply curve is vertical if
A) banks and the Fed jointly determine the money supply. B) the Fed is able to completely determine the money supply. C) banks and households determine the money supply. D) households and the Fed jointly determine the money supply.