Question
In: Economics
The two-period model with discounting predicts that non-renewable resource prices rise over time under efficient consumption....
The two-period model with discounting predicts that non-renewable resource prices rise over time under efficient consumption. Which of the following might explain why oil prices have not consistently risen in the past 50 years?
a. The U.S. has significantly increased oil production in recent years because of the shale boom.
b. The business cycle and major events such as the COVID-19 pandemic have caused oil prices to fluctuate over time.
c. OPEC has sometimes raised its quotas.
d. Only a and c are correct.
e. All of the above are correct
Solutions
Expert Solution
Solution: All of the above
Explanation: In the past decade US shale revolution has caused an increase in the oil production. Covid-19 has caused a major fluctuations in the demand for non-renewable resources; and consequently affected it's price. Moreover Organization of the Petroleum Exporting Countries has also increased the quotas at several times.
Rahul Sunny answered 2 years agoRelated Solutions
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