Authors libby rittenberg 711

3 Discuss the market for renewable natural resources and relate the market outcome to carrying capacity Explain and illustrate the concept of economic rent Natural resources are the gifts of nature They include everything from oil to fish in the sea to magnificent scenic vistas The stock of a natural resource is the quantity of the resource with which the earth is endowed For example, a certain amount of oil lies in the earth, a certain population of fish live in the sea, and a certain number of acres make up an area such as Yellowstone National Park or Manhattan These stocks of natural resources, in turn, can be used to produce a flow of goods and services Each year, we can extract a certain quantity of oil, harvest a certain quantity of fish, and enjoy a certain number of visits to Yellowstone As with capital, we examine the allocation of natural resources among alternative uses across time By definition, natural resources cannot be produced Our consumption of the services of natural resources in one period can affect their availability in future periods We must thus consider the extent to which the expected demands of future generations should be taken into account when we allocate natural resources Natural resources often present problems of property rights in their allocation A resource for which exclusive property rights have not been defined will be allocated as a common property resource In such a case, we expect that the marketplace will not generate incentives to use the resource efficiently In the absence of government intervention, natural resources that are common property may be destroyed In this section, we shall consider natural resources for which exclusive property rights have Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 711