« previous next »

Author Question: As in all other competitive markets price equals marginal cost in a market for a scarce, ... (Read 22 times)

Arii_bell

  • Hero Member
  • *****
  • Posts: 596
on: Jul 1, 2018
As in all other competitive markets price equals marginal cost in a market for a scarce, non-renewable resource that is traded in a competitive market.
 
  Indicate whether the statement is true or false

Question 2

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?
 
  A) 55
  B) 60
  C) 65
  D) 75
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


tandmlomax84

  • Sr. Member
  • ****
  • Posts: 323
Reply #1 on: Jul 1, 2018
Answer to Question 1

False. Price exceeds marginal cost in those markets because owners of those resources receive a rent. It is a compensation for the ownership of this scarce resource.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The immune system needs 9.5 hours of sleep in total darkness to recharge completely.

Did you know?

Of the estimated 2 million heroin users in the United States, 600,000–800,000 are considered hardcore addicts. Heroin addiction is considered to be one of the hardest addictions to recover from.

Did you know?

Pink eye is a term that refers to conjunctivitis, which is inflammation of the thin, clear membrane (conjunctiva) over the white part of the eye (sclera). It may be triggered by a virus, bacteria, or foreign body in the eye. Antibiotic eye drops alleviate bacterial conjunctivitis, and antihistamine allergy pills or eye drops help control allergic conjunctivitis symptoms.

Did you know?

Asthma-like symptoms were first recorded about 3,500 years ago in Egypt. The first manuscript specifically written about asthma was in the year 1190, describing a condition characterized by sudden breathlessness. The treatments listed in this manuscript include chicken soup, herbs, and sexual abstinence.

Did you know?

Cyanide works by making the human body unable to use oxygen.

Elle and associates investigated the cost to Datura wrightii of producing sticky leaf trichomes. Elle and associates investigated the cost to Datura wrightii of producing sticky leaf trichomes.
Norway lobsters on sale at a Spanish market Norway lobsters on sale at a Spanish market
Main Hall, Trajan's Market Main Hall, Trajan's Market
Cost Accounting 14 Cost Accounting 14
If the price charged for a candy bar is p(x) cents, then x thousand candy bars will be sold in ... If the price charged for a candy bar is p(x) cents, then x thousand candy bars will be sold in ...
Markets and Institutions Market Story Problem Markets and Institutions Market Story Problem
Video: baroreceptors

For a complete list of videos, visit our video library