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Economic factors in the optimal depletion of resources

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Title:Economic factors in the optimal depletion of resources
Authors:Peterson, Richard E.
Keywords:Kilauea
Puna
Big Island
Hawaii Island
Hawaii
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LC Subject Headings:Diminishing returns
Natural resources
Geothermal resources--Economic aspects
Date Issued:Mar 1975
Publisher:Hawaii Geothermal Project, University of Hawaii at Manoa
Citation:Peterson RE. 1975. Economic Factors in the Optimal Depletion of Resources. Honolulu (HI): Hawaii Geothermal Project, University of Hawaii.
Abstract:Both replenishable and nonreplenishable resources are exhaustible and even finite nonreplaceable resources can have infinite economic lives. The concept of ecological equilibrium) in which total recruitment of new mass is equal to the harvest rate) is relevant to both types of resources. The rate of use of existing stock is the intensive margin and investment in renewal through exploration and development represents the extensive margin. Both the rate and level of recovery are influenced by the economic motivation of the resource owner to maximize the present value of the resource. Unlike other branches of economics in which current production is pushed to the point where marginal profits are zero) it is shown that the profit-maximizing resource owner will postpone the current production of an additional unit if the present value of the profit which that unit could earn at some future date is larger than the marginal profit which can be earned today.
Description:Has 19 leaves. Bibliography: leaves 18-19.
Pages/Duration:21 pages
URI:http://hdl.handle.net/10524/22966
Appears in Collections: The Geothermal Collection


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