The Supply of a Resource, Such as Oil, Is Likely

question 31

Multiple Choice

The supply of a resource, such as oil, is likely to be

• A) equally elastic in both the short and long run.
• B) more elastic in the long run than in the short run.
• C) more elastic in the short run than in the long run.
• D) determined by the demand for the resource.

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Definitions:

Price

The monetary cost anticipated, called for, or disbursed in payment for an object.

Compensating Variation

An economic concept representing the amount of additional income an individual would need to maintain the same level of utility after a price change.

Utility Function

A mathematical representation used in economics to model the satisfaction or benefit a consumer derives from consuming goods and services.

Prices

The amounts of money required to purchase goods and services, serving as signals in an economy to allocate resources.