Natural resource economics, Microeconomics

Natural Resource Economics

Natural resource use started receiving the attention of economists since the beginning of modern economics. Limits to natural resources were discussed using basic laws of physics. viz., laws of thermodynamics, which have been introduced in economics as 'material balance approach'. According to this principle, materials are not destroyed during consumption, but merely transformed from one state to another; from a more useful to less useful state. From this understanding, 'residuals' from production and consumption. If generated excessively, can grow beyond the assimilative capacity of the environment. The term 'scarcity' is modified to include limitations on the environmental system.

What is important to understand is that the question of 'resource scarcity' cannot be addressed completely by referring to physical quantities alone. Scarcity is an economic concept and can be fully observed only by addressing concepts like prices, Costs and rents. Thus an important question before us is, given the scarce natural resource, how we allocate them efficiently. We will analyze 'natural resources' in the same way as non-natural resources are organized in production or consumption activity and determine the conditions for efficient allocation of the resources. Subsequently, we would turn to the problems in allocation if decision making is left to the market. In this context, we delve into the nature of rights of ownership and analyze how this would affect optimal allocation.

 

Posted Date: 12/18/2012 1:01:10 AM | Location : United States







Related Discussions:- Natural resource economics, Assignment Help, Ask Question on Natural resource economics, Get Answer, Expert's Help, Natural resource economics Discussions

Write discussion on Natural resource economics
Your posts are moderated
Related Questions
What are the economic implications of income inequality? How can economic theory be helpful to analyze the causes and impact of income inequality? What are the concerns and how the

a machine cost 18871.00 today. at the end of each year I own the machine & it gives me returns of 4,948.00 after paying repairs and maintenance. After 6 years, I expect to sell it

How might governments lower the natural rate of unemployment? An easy way to organise the answer is to separate possible solutions into two broad groups; interventionist and m

WITH reference to incidence taxation,explain with the help diagrams,who bears the incidence of taxation when the demand for a commodity is perfectly inelastic, perfectly elastic an

Pre-Funded Pension: A pension plan in that funds are invested and accumulated throughout an individual's working life in order to pay for subsequent disbursement of pension benefit


During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use supply and demand diagrams, how the following markets are affected in terms of pr

(a) Increase in technology and productivity take effect in the red bull market use and label a graph to explain the result of this change on each of the following (i) Market Pri

What is Game Theory?  Game Theory is a mathematical method of decision-making in which a competitive situation is examined to verify the optimal course of action for an interes

how the equilibrium output and price is determined in williamson model of managerial discretion?