The Figure Given Below Represents an Imperfectly Competitive Resource Market

question 21

Multiple Choice

The figure given below represents an imperfectly competitive resource market. Here common land (and not land used for specific purpose) is under consideration.Figure 18.1

-What is the most likely consequence when people's preference for current consumption rises in relation to future consumption?

• A)Interest rates will fall, and the rate of extraction of exhaustible natural resources will decrease.
• B)Interest rates will fall, and the rate of extraction of exhaustible natural resources will increase.
• C)Interest rates will rise, and the rate of extraction of exhaustible natural resources will decrease.
• D)Interest rates will rise, and the rate of extraction of exhaustible natural resources will increase.
• E)Interest rates will fall, and there will be no effect on the rate of extraction of exhaustible natural resources.