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 prices of land in declining cities.
D)When demand for computer programmers increased, more people went into that field.
E)When the price of oil rose, demand for solar panels increased.

Question

​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 prices of land in declining cities.
D)When demand for computer programmers increased, more people went into that field.
E)When the price of oil rose, demand for solar panels increased.

Quizplus · Accepted Answer

This is an example of a permanent resource price differential because land is a fixed resource, and its value varies based on a permanent change in demand in a growing city. The other choices represent changes in supply and demand in response to temporary price changes, which are not permanent resource price differentials.

​Which of the Following Is an Example of a Permanent

Which of the Following Is an Example of a Permanent