If Real Extraction Costs Do Not Change,the Relative Price of a Finite

question 27

Multiple Choice

If real extraction costs do not change,the relative price of a finite resource would be expected to

• A)fall over time.
• B)remain constant over time.
• C)rise at a rate given by the nominal rate of interest.
• D)rise at a rate given by the real rate of interest.

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Definitions:

Percentage Change

Percentage change is a mathematical calculation that shows how much a specific number has increased or decreased, expressed as a percentage of its previous value.

Cross-price Elasticity

A measure of how the quantity demanded of one good responds to a change in the price of another good, represented as a ratio.

Complements

Goods or services that are used together, where the consumption of one enhances the use or value of the other.

Inferior Goods

Goods for which demand decreases as consumer income rises, opposite to normal goods.