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Threshold of economic viability [#permalink]
24 Jan 2004, 21:53
Took powerprep test 2 for the first time, and I missed this one:
Technological improvements and reduced equipment costs have made converting solar energy directly into electricity far more cost-efficient in the last decade. However, the threshold of economic viability for solar power (that is, the price per barrel to which oil would have to rise in order for new solar power plants to be more economical than new oil-fired power plants) is unchanged at thirty-five dollars
Which of the following, if true, does most to help explain why the increased cost-efficiency of solar power has not decreased its threshold of economic viability
A. The cost of oil has fallen dramatically.
B. The reduction in the cost of solar-power equipment has occurred despite increased raw material costs for that equipment
C. Technological changes have increased the efficiency of oil-fired power plants
D. Most electricity is generated by coal-fired or nuclear, rather than oil-fired, power plants
E. When the price of oil increases, reserves of oil not previously worth exploiting economically viable
Re: Threshold of economic viability [#permalink]
01 Mar 2013, 05:28
STATEMENT: (1) Solar power has become more efficient (2) Threshold = price per barrel of oil to which price has to rise for solar power to be more economical than oil-fired plants (3) BUT threshold remain the same...
WHY IS (A) WRONG? Firstly, threshold refers to a theoretical price of oil and not the actual price of oil. Secondly, price of oil is more of just a measurement that shows how more economical is the solar power plant compared to oil-fired plants
F(efficiency of solar power plant, efficiency of oil-fired plant) = price of oil per barrel
Two things that are actually variables of this formula are : (1) efficiency of solar power plant and (2) efficiency of oil-fired plant.
Rise in Price = is theoretical price of oil to show economic viability
Only, C discusses the other variable in the formula which is efficiency of oil-fired plants.
Impossible is nothing to God.
Re: Threshold of economic viability
01 Mar 2013, 05:28