An increase in the value that future consumers are expected to place on an exhaustible resource ________ the marginal cost of extraction and ________ the current price of the resource.

Question

Quizplus · Accepted Answer

An increase in the expected future value of an exhaustible resource leads to a decrease in current supply as suppliers withhold the resource in anticipation of higher future prices, which increases the marginal cost of extraction and raises the current price.

An Increase in the Value That Future Consumers Are Expected