Economic Theory Posits That a Resource That Is Finite and Being

question 39

Multiple Choice

Economic theory posits that a resource that is finite and being depleted will rise in price continuously and demand will be reduced.In fact, a recent study, graphing the price behavior of lead, zinc, and copper found that until about 2007,

• A)prices rose steadily, as predicted.
• B)prices dropped precipitously.
• C)prices remained remarkably stable.
• D)prices were up and down with no discernible pattern.

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Definitions:

Price Discrimination

The practice of selling the same product to different buyers at different prices based on willingness to pay, not differences in cost.

Identical Goods

Products that are indistinguishable from each other in terms of quality, function, and characteristics.

Production Costs

The total expense incurred in manufacturing a product or providing a service, including raw materials, labor, and overhead expenses.

Monopolistic Competition

An industry that has many firms producing a differentiated product.