The owner of an exhaustible resource should ________ current extraction if the expected percentage price increase of the resource is ________ the interest rate.

Question

Quizplus · Accepted Answer

The correct answer is B because the owner of an exhaustible resource should increase current extraction if the expected percentage price increase of the resource is less than the interest rate. This is because the owner can earn a higher return by extracting and selling the resource now than by waiting for the price to increase.

The Owner of an Exhaustible Resource Should ________ Current Extraction