Suppose That the Price of Oil Today Is $20 and the Interest

question 2

Multiple Choice

Suppose that the price of oil today is $20 and the interest rate is 5%.Further,suppose that the interest rate remains unchanged and no new discoveries of oil are made.If 2 years from now,the price of oil is $21.50,from the economist's point of view which of the following statements is correct?

• A)The rate of oil extraction has been too slow.
• B)The rate of oil extraction has been too rapid.
• C)The rate of oil extraction has been exactly right.
• D)The rate of oil extraction has been either exactly right or too slow but it definitely could not have been too rapid.

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Definitions:

Negotiation

Is the process of making joint decisions when the parties involved have different preferences.

Rational Argument

A logical, fact-based discussion aimed at reaching a conclusion or persuading others through reasoning.

Conflict

A situation where two or more parties have opposing ideas, interests, or beliefs, leading to a disagreement.

Managers

Are persons who support the work efforts of other people.