The user cost of an exhaustible resource is A) the same as its ...

[bucstennis@aim.com]

The user cost of an exhaustible resource is
 
  A) the same as its price.
  B) the same as its production cost.
  C) the opportunity cost of using the resource today rather than saving it for the future.
  D) the amount of the resource that is extracted today.
  E) not related to the amount of the resource that exists.

Question 2

Refer to Scenario 13.17. If the Incumbent Monopoly installed excess capacity in advance of the Potential Entrant's appearance on the scene, and this excess capacity had a cost of X, it would reduce by X the Incumbent Monopoly's payoffs in the
 
  A) top row.
  B) bottom row.
  C) left column.
  D) right column.
  E) entire matrix.

[BUTTHOL369]

Answer to Question 1

C

Answer to Question 2

E

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