If the increase income from sale of a nonrenewable resource in the current period is equal to the present value of income sale of the resource in the next period, the owner should:
A)sell all of the resource in the next period.
B)sell some of the resource now and some in the next period.
C)sell all of the resource now.
D)wait to see what will happen in the future.

Question

Quizplus · Accepted Answer

This scenario suggests that the owner can maximize their utility by diversifying the timing of their sales. Selling some now and some later allows the owner to balance the benefits of immediate income against the potential for future income, without being overly exposed to the risks of price fluctuations or changes in demand. This strategy also aligns with the principle of intertemporal choice in economics, which involves making decisions about the allocation of resources over different periods.

If the Increase Income from Sale of a Nonrenewable Resource