Author Question: What determines the supply of a nonrenewable natural resource? What will be an ideal ... (Read 110 times)

rmenurse · **on:** Jun 29, 2018

What determines the supply of a nonrenewable natural resource?

What will be an ideal response?

Question 2

Because a firm has implicit costs as well as explicit costs

A) its accounting profit is always less than its economic profit.
B) its economic profit is usually the same as its accounting profit.
C) its economic profit is usually less than its accounting profit.
D) its economic profit is usually more than its accounting profit.

Bsand8 · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

The supply of a nonrenewable natural resource depends on the total known amount, such as the known oil reserves in the market for oil. It also depends on the scale of current production facilities, which determines the marginal cost of producing the resource. For instance, when more oil wells are sunk, the supply of oil increases. The expected future price also affects the supply. The higher the future expected price, the smaller the present supply of the resource.

Answer to Question 2

C