Asked by Elorah Stoner on Apr 28, 2024
Verified
According to the concept of present value,a $50 barrel of oil today is worth:
A) less than a $50 barrel in 2 years.
B) more than a $50 barrel in 2 years.
C) the same as a $50 barrel in 2 years.
D) the same as a $50 barrel in 2 years,but only if there is no inflation during those 2 years.
Present Value
Today’s value of some amount of money that is to be received sometime in the future.
$50 Barrel
A pricing level for a barrel of crude oil, often used as a reference for energy market analysis and economic forecasting.
- Examine how governmental regulations and economic doctrines influence choices related to the extraction of resources.
Verified Answer
TT
Tasfia TasnimApr 30, 2024
Final Answer :
B
Explanation :
According to the concept of present value, money received in the future is worth less than money received today due to factors like inflation and the opportunity cost of not being able to invest the money today. Therefore, a $50 barrel of oil today is worth more than a $50 barrel of oil in 2 years, assuming some level of inflation during that time period.
Learning Objectives
- Examine how governmental regulations and economic doctrines influence choices related to the extraction of resources.
Related questions
When the Benefits of Conservation and Future Use Are Excluded ...
If Property Rights Are Weak or Uncertain, Resource Extraction Will ...
Alex and Ben Are Both Loggers Wanting to Harvest Timber ...
Some Nations Are Increasing the Amount of Land Covered by ...
Higher User Costs Imply That a Resource Should Be Extracted ...