Sources: U.S Bureau of the Census, Statistical Abstract of the United States, online; U.S Energy Information Administration, Annual Energy Review, online In setting their expectations, people in the marketplace must anticipate not only future demand but future supply as well Demand in future periods could fall short of expectations if new technologies produce goods and services using less of a natural resource That has clearly happened The quantity of energy—which is generally produced using exhaustible fossil fuels—used to produce a unit of output has fallen by more than half in the last three decades At the same time, rising income levels around the world, particularly in China and India over the last two decades, have led to increased demand for energy Supply increases when previously unknown deposits of natural resources are discovered and when technologies are developed to extract and refine resources more cheaply Figure 13.10 "An Explanation for Falling Resource Prices" shows that discoveries that reduce the demand below expectations and increase the supply of natural resources can push prices down in a way that people in previous periods might not have anticipated This scenario explains the fall in some prices of natural resources in the latter part of the twentieth century To explain the recent rise in exhaustible natural resources prices, we can say that the factors contributing to increased demand for energy and some other exhaustible natural resources were outweighing the factors contributing to increased supply, resulting in higher prices—a scenario opposite to what is shown in Figure 13.10 "An Explanation for Falling Resource Prices" This upward trend began to reverse itself again in late 2008, as the world economies began to slump Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 716