Among the factors that might lead to a divergence from the path of prices for a depletable resource predicted by the economic models are: (i) unexpected discoveries of new reserves; (ii) new technologies which reduce extraction costs.
A)i and ii
B)i but not ii
C)ii but not i
D)neither i nor ii

Question

Among the factors that might lead to a divergence from the path of prices for a depletable resource predicted by the economic models are: (i) unexpected discoveries of new reserves; (ii) new technologies which reduce extraction costs.
A)i and ii 
B)i but not ii 
C)ii but not i 
D)neither i nor ii

Quizplus · Accepted Answer

Unexpected discoveries of new reserves increase supply, potentially lowering prices. New technologies can reduce extraction costs, also affecting prices. Both factors can lead to divergence from predicted price paths.

Among the Factors That Might Lead to a Divergence from the Path