Question

Which of the following about backstop technologies and nonrenewables is NOT true? Select one:

a. A subsidy that decreases the price of a backstop will decrease the current price of oil, and consumption of oil will increase.
b. A backstop technology is a perfect substitute for non-renewable resource that can be produced in any amount at constant (usually high) price.
c. When the price of the non-renewable reaches the price of the backstop, we switch to using the backstop technology.
d. Subsidizing renewables may have unintended consequence of pushing consumption of fossil fuels further into the future.

Answer 1

Answer:D. Subsidizing renewables may have unnitended consequences of pushing consumption of fossil fuels further into the future.

Step-by-step explanation:

The backstop technology is the alternative use of renewable resources like sun, wind for non renewable resources like fossil fuels.

A subsidy that decrease the price of backstop technology may force the price of fossil oil to fall and consequently an increase in demand in demand of fossil fuels.

Though a backstop technology is a perfect substitute for fossil oil but it's cost is usually high.

If the price backstop technology equals the price of fossil oils, consumers are more likely to patronize backstop technology.

Subsidizing renewables will reduce the partronage of fossil fuels in the future.