Optimal depletion of non-renewable resources with special reference to the oil resources

Farhat, Mohamed Lutfi Fathi (1976) Optimal depletion of non-renewable resources with special reference to the oil resources. University of Southampton, Doctoral Thesis.

Abstract

The economic resources can be classified, according to their renewability, as non-renewable and renewable resources.In the present thesis an attempt was made to study the first category. Particular attention has been given to the underdeveloped economies in the framework of international trade. Careful consideration has been given to practical and realistic assumptions.The relationship between development programmes and the optimal paths of the non-renewable resources was considered as well as the consumption, the imports, the exports ... etc.Three kinds of approaches were adopted, the welfare maximization, the consumers surplus and the profit maximization and the relation between these alternatives was established.It was discovered, in general, that the consumption must increase as must the price of the non-renewable resources at home. Abroad, the direction of the prices depends on the elasticity of the foreign demand. When the foreign demand is elastic the prices must increase and decrease when it is inelastic.When profit maximization was considered, it was discovered that the price of the resources must increase both at home and abroad. When the foreign demand is inelastic increasing resources prices satisfy the profit maximization but does not satisfy the welfare maximization unless investment is considered abroad.

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