Question

Define each of the following terms and concepts and explain their significance in the economics of natural resources. In your discussion of each term/concept, give relevant examples.

a. [3 marks] Natural resource rents

b. [3 marks] Public good

c. [3 marks] intertemporal efficiency

d. [3 marks] Nonrenewable resources

e. [3 marks] Maximum sustainable yield

f. [3 marks] Incentive-based policies

Answer 1

a) Natural resource rents::--generally natural resources are valued with reference to their economic rents,also called as resource rents.So natural resource rents are total revenue generated from the extraction of a natural resource,less the cost of extracting the resource.Examples inlcude:oil rents,natural gas rents,forest rents etc.

b) Public good :---typical definition is that its a type of good that no one can exclude you from using it,and your usage should not have any impact on others.simply it should be non-rival and non excludable.Examples inlcude:National defence,road,gps,wikipedia etc.

c) Intertemporal efficiency:---It is achieved when you get a balance between resources usage for the present purposes as well as conserving resources for the future. For example if you use more resources(ex:forest,fossil fuels),then future generation will suffer with respect to standards of living and many more.

d) Nonrenewable resources:--Resources which will be depleted once we use and cant be replenished.exmaples inlcude fossil fuels such as coal,natural gas,crude oil etc.