A "Backstop Resource" Is a Close Substitute for a Depletable

question 167

Multiple Choice

A "backstop resource" is a close substitute for a depletable resource that is available in almost unlimited supply but at a higher cost.Shale oil is a backstop resource for crude oil.Which of the following statements is correct?

• A)The production of shale oil is likely to increase over time even if crude oil is still available.
• B)Shale oil is unlikely to be produced until all the crude oil has been depleted.
• C)The existence of shale oil as a backstop resource will discourage firms from seeking new reserves of crude oil.
• D)In the future, shale oil is likely to be produced at the same time as crude oil and to sell for a lower price.

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