Resource Depletion and Resource Allocation Part 1 Environmental Economics

>> YOUR LINK HERE: ___ http://youtube.com/watch?v=8be3-6en8gU

I give a scenario in which a nonrenewable resource is allocated between two time periods. I show how incentives may lead to overuse of the good in the first period in a way that creates larger costs in the second period. This resource depletion problem highlights a market failure in which the market outcome for society across time is not the outcome that maximizes welfare. • In part 2, I will show how to use a resource depletion tax to correct this market 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