Consider Two Resource Markets,A and B,where the Demand Curves for the Resources

question 160

Multiple Choice

Consider two resource markets,A and B,where the demand curves for the resources slope downward.The supply curve of resource A is horizontal,and the supply curve of resource B is vertical.In market A,the equilibrium price is $6 and the equilibrium quantity is 100 units.In market B,the equilibrium price is $20 and the equilibrium quantity is 30 units.Which of the following is true?

• A)Total resource earnings are the same in both markets.
• B)Total resource earnings are greater in market A.
• C)Total resource earnings are greater in market B.
• D)All earnings from resource A are economic rent.
• E)All earnings from resource B are its opportunity costs.