The Marginal Cost of Extraction of a Nonrenewable Resource Increases

question 16

Multiple Choice

The marginal cost of extraction of a nonrenewable resource increases with passage of time because:

• A)the technology used in extraction depreciates in value.
• B)the price of the product that uses this resource increases.
• C)the exchange rate in the international market appreciates.
• D)the tragedy of commons problem is encountered.
• E)the resource gradually becomes scarce.

Identify and explain the modifications to common law of contracts brought by Article 2 of the UCC, especially regarding consideration.

Differentiate between types of contracts (e.g., output and requirements contracts versus illusory promises).

Analyze the adequacy of consideration and its role in the enforceability of contracts.

Recognize the elements necessary for a binding contract, including bargained-for exchange and legal sufficiency.

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, measured above the supply curve.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, reaching a state of balance where there are no surplus or shortage.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, reflecting gains from trade.

Price Ceiling

A government-imposed limit on the maximum price that can be charged for a product or service.