Unit 9: Slideshow Flashcards

1
Q

How should we decide to allocate nonrenewables across generations

A

Hartwick’s rule

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2
Q

What is Hartwick’s Rule

A

Value of nonrenewables to be invested for future generations

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3
Q

How do we value resource consumption that will take place in the future

A

Interest Rates

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4
Q

What is RESOURCE DEPLETION TAX

A

Tax imposed on the extraction or sale of natural resource

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5
Q

What is HOTELLING’S RULE

A

In equilibrium the net price of a resource must rise at a rate equal to the rate

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6
Q

How do high discount rates relate to extraction

A

Extract more know and invest-favour the present more

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7
Q

How do low discount rates relate to extraction

A

Greater incentive to conserve

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8
Q

What other factors affect prices on NonRenewable Resources

A

-changing estimates of reserves
-changing definitions of oil
-technological changes
-changing demand curve-rising incomes
-cheaper alternatives
-cheaper alternatives
-lack of investment
-capital constraints
-changing expectations

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9
Q

What are ECONOMIC RESERVES

A

quantity of resource that can be extracted profitably

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10
Q

What are the 2 factors of ECONOMIC RESERVES

A

Current Price
Technology

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11
Q

What are PHYSICAL RESERVES

A

Total quantity without looking at economic feasibility

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12
Q

What are IDENTIFIED RESERVES

A

quantity of reserves that have been identified
-varying levels of confidence
-economic & subeconomic

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13
Q
A
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