Author Question: Next year's expected price of oil is 88 per barrel and the interest rate is 10 percent per year. ... (Read 123 times)

rl · **on:** Jun 29, 2018

Next year's expected price of oil is 88 per barrel and the interest rate is 10 percent per year. According to the Hotelling Principle the price of oil this year is

A) 80 per barrel.
B) 88 per barrel.
C) 96 per barrel.
D) None of the above answer is correct.

Question 2

Vouchers create the efficient outcome only if production is such that the marginal social cost

A) exceeds the marginal private benefit.
B) equals the marginal external benefit.
C) equals the marginal social benefit.
D) is decreased so it equals the marginal private cost.