Define the statically efficient allocation of depletable resources. Define the dynamically efficient allocation of depletable resources....

Define the statically efficient allocation of depletable resources. Define the dynamically efficient allocation of depletable resources. Use a diagram to explain the difference between the two efficiency criteria. When is the same allocation of depletable resources be achieved under the two efficiency criteria?

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Expert Solution

Answer:

Depletable resources:

The deplotable resources also known as non-renewable resources where the stock or resources decreases over the time whenever it is used but the used stock or resources cannot be renewed.

Statically efficient allocation of deplotable resources:

Static efficeincy helps to allocate deplotable resources only at one point at a time which involves the concept of productive efficiency producing at lower point with given existing resources and future inputs.

Dynamically efficient allocation of deplotable resources:

Dynamic efficiency involves the increase in productivity with new technology which again increased efficiency over a period of time.

Difference between both the efficiency:

Time is not important in static efficiency of allocation where as time is important in dynamic efficiency of allocation.

Both the allocation achieved at same when the allocation using both the efficiencies at a same time.

Rahul Sunny answered 1 year ago

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