Which of the following is an example of a permanent resource price differential?
A)When the price of oil increases, oil exploration increases.
B)When the price of CDs falls, CD production decreases.
C)When the demand for land in a growing city increases, its price increases more than the price of land in declining cities.
D)When the demand for computer programmers increased, more people went into that field.
E)When the price of oil rose, demand for solar panels increased.

Question

Quizplus · Accepted Answer

This choice describes a situation where there is a permanent resource price differential - the demand for land in a growing city increases, causing its price to increase more than the price of land in declining cities. This differential is likely to persist as long as the city continues to grow and demand for land remains high. The other choices describe temporary changes in market conditions that may lead to adjustments in production or consumption, but do not necessarily imply a permanent price differential.

Which of the Following Is an Example of a Permanent