Markets for Factors of Production LOSG习题精选 describe, resources, between, 2010

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LOS g: Differentiate between renewable and nonrenewable natural resources and describe the supply curve for each.

Which statement about renewable and non-renewable resources is most accurate?

A) Land is considered a renewable resource.

B) The supply curve for a non-renewable resource is perfectly elastic and the price is determined by demand for it.

C) The known stock of a non-renewable resource must decrease as the resource is used.

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Land is considered a renewable resource because using it in the present does not prevent its use in the future. The known stock of a non-renewable resource is fixed in the short term, but can increase in the long term as technology makes more of the resource accessible. The supply curve for a non-renewable resource is perfectly elastic at that price, and the quantity supplied is determined by demand.

 

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Which of the following best describes the elasticities of supply for renewable and non-renewable resources?

Renewable resource

Non-renewable resource

A) Inelastic Perfectly inelastic

B) Perfectly elastic Perfectly inelastic

C) Perfectly inelastic Perfectly elastic

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The supply (flow) of a renewable resource is fixed at any point in time. Therefore the supply is independent of price, or perfectly inelastic. Supply (stock) of a non-renewable resource is perfectly elastic, as the resource is supplied from its known stock at a price equal to the present value of its expected price in the next period.

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The supply of a renewable resource is:

A) independent of price and perfectly inelastic.

B) independent of price and perfectly elastic.

C) dependent on price and relatively elastic.

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The supply of renewable resources over a period of time is fixed. The supply of renewable resources is, therefore, independent of price and perfectly inelastic.