Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 32, Problem 8E
To determine
Difference in markets of renewable and non-renewable resources.
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Explain why we will likely never “run out” of a nonrenewable resource such as oil. Does this also imply that we always be able to extract all the oil we need? Explain.
Which of the following statements on dynamic efficiency is correct?a. Dynamic efficiency is the efficient use of resources when it is not necessary toinclude considerations.b. It compares today’s value to the future value of extracting a resource.c. The future value of a resource does not need to be discounted in order to compareit the value of today’s resource.d. The value of today’s resource needs to be discounted in order to compare its valueto the future value of a resource
Explain the term resource in economics
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- Give two factors that lead to the price of energy from new technologies to increase.arrow_forwardSuppose a depletable natural resource has no substitute. The resource can be extracted from the ground at a constant marginal cost. Furthermore, the marginal willingness to pay exceeds the marginal cost for the initial quantities of the resource, so it is worth extracting at least some of the resource. In a dynamically efficient allocation over many periods, when will most of the resource be extracted (earlier periods or later periods)? Why? At what point will the resource run out? Will the resource run out abruptly or smoothly? Why?arrow_forwardA fast-food company spends millions of dollars to develop and promote a new hamburger on its menu only to find that consumers won't buy it because they dont like the taste. From an economic perspective, the company should keep the hamburger on the menu because they have spent so much money and time developing and promoting the product. spend more money to develop a more efficient way to cook the hamburger so it cooks in a shorter time. pull the hamburger off the menu and treat the development and promotion expenditures as a sunk cost. keep trying to sell the hamburger so that people who developed and promote it have a job with the company.arrow_forward
- In market economies, fifi rms rarely worry about the availability of inputs to produce their products, whereas in command economies input availability is a constant concern. Why the difference?arrow_forwardWhat does the observed market price for a depletable natural resource reflect? What factors might cause an increase in the price of a depletable natural resource?arrow_forwardWhat is the scope of agricultural economistsarrow_forward
- A typical worker will earn £300k in their youth and £600k in middle-age. Over their lifetime, they must choose between two “goods”: consumption in their youth and consumption in middle-age.When young, the worker has the option of putting their earnings in the bank at an interest rate of 0% - these savings can then be spent in middle-age. Alternatively, they can borrow money from the bank when young. This loan must be paid back in middle-age at a 100% interest rate.(b) Draw a large graph with “consumption when young” on the vertical axis and “consumption in middle-age” on the horizontal axis. Represent the worker’s budget set. Note: both axes should be labelled from £0 to £1,000k.arrow_forwardWhat is supply? Decision making behavior of sellers and shows the quantity that sellers are willing and able to sell at different prices. All of the above production possibility curve Decision making behavior of consumers and shows the quantity that consumers are willing and able to buy at different prices.arrow_forwardA clothing company can use one of the following four production processes to produce 5,000 garments per month. Which production process is the most productively efficient? One that involves 20 workers and 20 machines One that involves 30 workers and 50 machines One that involves 30 workers and 20 machines One that involves 20 workers and 50 machinesarrow_forward
- A decrease in the productivity of a resource will decrease the demand for that resource. true or false?arrow_forwardI5 The world’s R/P ratio for oil has been approximately 50 years for the last two decades. Explain what this means and how it is possible that the R/P value has not significantly decreased despite continual production of the resource over the last two decades.arrow_forwardWhat might happen to the cost of a resource as it becomes scarcer?arrow_forward
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