The Fact That New Methods to Extract Oil Are Developed

question 110

Multiple Choice

The fact that new methods to extract oil are developed as oil prices increase suggests

• A)that methods of production do not change in response to factor-price changes.
• B)that invention is exogenous.
• C)that invention does respond to economic signals and is endogenous.
• D)that oil has many close substitutes.
• E)nothing; changes in technology occur regardless of market prices.

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Definitions:

Bond Payable

A long-term liability account that records the amounts owed to bondholders by the issuer.

Straight-Line Method

A technique for determining depreciation or amortization that involves uniformly distributing the cost of an asset throughout its lifespan.

Contract Rate

A contract rate is a pre-agreed price or fee set in a contract for services or goods, which remains fixed for the duration of the agreement.

Market Rate

The prevailing price or interest rate at which goods, services, or securities are traded in the open market.