Anyone remember this theory?
yup, the price of non renewable is present value of expected risk free rate.
Nice saurya! 10+ 
saurya_s Wrote: ------------------------------------------------------- > yup, the price of non renewable is present value > of expected risk free rate. Could you please be more specific? Thanks!
Hotelling principal: Staying in a hotel for the next 10 days should improve your chance of passing immensly.
Doubtful you’ll ever touch this on the test. My understanding of it is like at 80% but basically its the principal that the price of a non-renewable resource needs to grow at the current discount rate. If the price is expected to grow less than the discount rate, they should produce more and invest the proceeds at the risk-free rate. If greater, they’d wait to produce in a later period to get that higher price. Supposedly that maximizes the present value of the resource. But I can’t conceptual think of the math.
SirViper - not to divulge anything and violate the standards…but your statement of ‘Doubtful you’ll ever touch this on the test’ is completely off…
even in the textbooks, they don’t pay much attention to it, other than to state briefly what it’s about.