Resource Allocation Over Time Flashcards
1
Q
Statically Efficient
A
considering only a single time period for the evaluation of a depletable resource’s efficient management
2
Q
Dynamically Efficient
A
consideration of future periods is part of the depletable resource’s efficient management evaluation, i.e. maximizing the Present Value of Net Benefits across all relevant time periods
3
Q
Hotelling Rule
A
in the dynamically efficient outcome, the net price of the resource will increase at the rate of interest
4
Q
Net Price
A
Price of Demand - Price of Supply
5
Q
Choke Price
A
the maximum price on the demand curve
