How the Price of a Depletable Resource Changes Over Time

question 76

Multiple Choice

How the price of a depletable resource changes over time depends on

• A)how the technology of resource extraction changes.
• B)the interest rate.
• C)how the technologies of production change in firms that use the resource.
• D)All of the above are correct.

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Definitions:

Accounting Profit

Net income of a company is determined by deducting total expenses from total revenues, in line with established accounting norms.

Implicit Costs

The opportunity costs associated with a company's resources that are not directly paid out in cash but represent foregone alternatives.

Opportunity Costs

The cost of forgoing the next best alternative when making a decision.

Explicit Costs

Direct, out-of-pocket payments for goods or services used in the production of a product or service.