According to the Hotelling Principle,the Price of an Nonrenewable Resource

question 161

Multiple Choice

According to the Hotelling Principle,the price of an nonrenewable resource is expected to

• A) fall slowly over time.
• B) fall at a rate equal to the interest rate.
• C) fluctuate randomly.
• D) rise at a rate equal to the interest rate.
• E) remain constant over time.

---

Definitions:

Wage Rate

The amount of money paid to an employee per unit of time worked, often hourly, daily, or annually.

Complementary Resources

Goods or services that are used together, where the use of one increases the value or demand for the other.

Shift Demand

A change in the quantity demanded at every price point, caused by factors other than the price of the product itself.

Derived Demand

Demand for a good or service that arises from the demand for another good or service; for example, the demand for steel is derived from the demand for cars.