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The Long-Run Behavior of Natural Resource Prices
Observations
– Exhaustion of copper has increased by a hundred fold from 1880 through 1998 signifying a large increase in demand.
– The actual price for copper has stayed relatively constant.
Changes in Market Equilibrium
Conclusion
– Reduction in the costs of production have increased the supply by more than enough to balance the increase in demand.
Consider an upstream firm in Russia that mines iron ore at a total cost of $15 q , where q is the number of tons of ore. This upstream firm then ships ore to Germany for processi
f(x1 x2,x3,x4) =min(x1/4x22/3,x3+2x4)
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Explain how diminishing returns differ from diminishing returns to scale. The answer should clearly distinguish among SR (one or more factors are fixed) and LR (where all facto
concept of supply
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