Suppose you are deciding how much oil to pump from your oil well in the next two years. Other things equal, you will be more likely to pump more oil this year than next year if you expect

Question

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If the price of oil is expected to be higher this year than next year, it would be more profitable to pump more oil this year since you would receive a higher price for each unit of oil sold. This assumes that the cost of pumping the oil remains constant.

Suppose You Are Deciding How Much Oil to Pump from Your