Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Homework Quiz #6 Due Oct. 21 #3 Oct. 23 Extra Credit Writing 16th by 5pm. Writing Assignment due Oct. Assignment Due Oct. 23rd Let demand • P=8-0.4Q Let extraction cost • MC=$2 Let supply be fixed at 40 units The Population Bomb http://en.wikipedia.org/wiki/The_Popula tion_Bomb • Written in 1968, predicting a population crash due to resource scarcity • The Simon -Ehrlichwager : http://en.wikipedia.org/wiki/Simon%E2%80%9 3Ehrlich_wager Physical supply - available reserves measured in physical terms without regard for cost and value Economics supply – the amount of a resource that is available based on current prices and technology Subeconomic resources – resources whose costs of extraction are too high to make production worthwhile Economic reserves – resources of high enough quality to be profitably produced and are identified Identified reserves – the identified quantity of a resources; includes both economic and subeconomic reserves Measured reserves – resources that have been identified and whose quantity is known with certainty Indicated or inferred – resources that have been identified but whose exact quantity is not known with certainty Undiscovered Reserves • Hypothetical – the quantity of a resource not identified with certainty but hypothesized to exist • Speculative – the location and quantity of a resource has not been identified but is hypothesized to exist R=P-MC PV [R] = R0 + R1/(1+r) + R2/(1+r)2 +… Optimal extraction quantity R0 = R1/(1+r) = R2/(1+r)2 =… Hotelling’s Rule - net price rises over time with the rate of interest. Choke price – the minimum price of a good or service that would result in a zero quantity demanded Price path – the price of a resource over time Extraction path – the extraction rate of a resource over time Changes to reserves • The resources are extracted and used => diminished reserves • New resource deposits are discovered => increasing reserves • Changing price and technology can make more or less of the known reserves economically viable The transition for two non-renewable with different marginal costs will be a smooth one. The rate of increase of total marginal cost slows down after the time of transition because the marginal user cost represents a smaller portion of total marginal cost for the second, higher cost resource. 19 Pressures on transportation routes Reconfiguration of gas corridors TransCanada GTN Bison LNG Ruby LNG REX Kern River Expansion Fayetteville Express Gulf Crossing Midcon Express LNG FGT Expansion Flow increase Flow decrease 20 U.S. Coal Generation Supply Curve 2011 Source: Derived from SNL data 21 Homework Quiz #6 Due Oct. 21 #3 Oct. 23 Extra Credit Writing 16th by 5pm. Writing Assignment due Oct. Assignment Due Oct. 23rd