If an Exhaustible Resource Is Scarce,has Constant Marginal Cost Over

question 119

Multiple Choice

If an exhaustible resource is scarce,has constant marginal cost over time,and is sold in a competitive market,then

• A) its price increases over time.
• B) its price will not be a function of the interest rate.
• C) its price moves independently of past prices.
• D) its price equals marginal cost.

---

Definitions:

Purchase Orders

Official documents issued by a buyer committing to pay the seller for the supply of specific products or services at agreed prices and terms.

Expenditures

Funds spent by a business in the pursuit of profit and other business activities, including operating and capital expenses.

Private Purpose Trust Fund

A fund typically used by governmental entities to report all other trust arrangements under which principal and income benefit individuals, private organizations, or other governments.

Fiduciary Fund

A fund used to account for assets held by a government in a trustee or agency capacity for individuals, private organizations, or other governments.