Author Question: Consider a wine maker who has put her wine in bottles. The question is whether to store the wine for ... (Read 186 times)

tsand2 · **on:** Jul 1, 2018

Consider a wine maker who has put her wine in bottles. The question is whether to store the wine for a marginal cost of 1 per year or to sell the wine today at a price of 10. If the interest rate is 6, how much must the price of the wine increase in the next year to justify storing it?

A) 1.66
B) 1.27
C) 0.72
D) 0.45

Question 2

The spread between price and marginal cost of an exhaustible resource must grow by the rate of interest so that

A) resource owners earn a profit.
B) resource owners are willing to sell some of the resource in the future.
C) the price of the resource remains constant in real terms.
D) the marginal cost of extracting the resource declines.

6ana001 · **Reply #1 on:** Jul 1, 2018

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 35% of students answer this correctly