366) Suppose someone owns a mineral resource and suppose the interest rate is currently 5%. Under which of the following circumstances would the owner definitely prefer to extract it now rather than in one year’s time?
Answer is:
If the expected price next year exceeds the extraction cost but by less than 5%
Related Micro Economics MCQ (GK Set-1) with Answers
Answer is:
They expect the price next year, minus the extraction cost, to exceed the figure for this year by exactly 5%
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In practice, the price may not rise steadily over time, but it will always rise
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The fact that undertaking further education signals to employers that they are hard-working ad ambitious
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