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Question 1: Read the 4 pages (from page 199 to 202) provided and explain the
price fluctuation of energy over time.
In the early 1970, the runup of energy prices was in fact of a political phenomenon.
It is not connected with scarcity factors. This problem led to very important
amounts of energy conservation. Users tent to save reduce their energy
consumption. By 1990, the real prices of some important items such as gasoline
had declined to pre-1970s levels but few people still gave much thought to energy
conservation.
Question 2: Read the file: Natural Resource Adequacy and and answer the
question: What is the viewpoint of pessimism and optimism toward this matter?
Pessimists studies arrive at the conclusion that natural resource scarcities and
several other factors would lead to preciptous declines in the output of modern
economies, beginning early in the 21 century. The pessimists can point to history to
support their view. The abundance of land and water adequately supplied every
material want, ministered liberally the every sensuous enjoyment. More than a half
of the Roman Empire’s extent is either deserted by civilized man and surrendered to
hopeless desolation, or at least greatly reduced in both productiveness and
population.
At the other end of the spectrum are the extreme optimists. They admit that natural
resource scarcities will surely occur in the future but human beings can overcom
this challenge by finding substitutes for resources that become scarce and bringing
population growth under control. The optimists can also call upon history to
support their position. When England began to experience severe wood shortages,
along came coal technology upon which to build the industrial revolution. When
coal started becoming scarce, petroleum technology was developed. When serious
food scarcities threatened the burgeoning population of Asia, the green revolution
was initiated to increase food production potential. When domestic energy prices
increased rapidly in the 1970s, American producers and consumers demonstrated a
surprising ability to adjust technologies and behaviors so as to conserve energy.