by johnmarkos » Tue 04 Apr 2006, 04:41:30
$this->bbcode_second_pass_quote('coyote', 'O')kay, cool. So, instead of saying, "geology will be the limiting factor," would it then be more appropriate to say that there will be a "vertical supply curve," since the quantity supplied (how much we'll be able to pump in a year) will be fixed, no matter what the market price?
No, at any given time, the quantity supplied always has an upper limit, determined by geology, equipment, tankers, whatever. The difference is that post-peak, supply is constrained, which shifts the whole curve to the left. My Macro textbook (
Principles of Macroeconomics, by N. Gregory Mankiw) uses the example of an earthquake causing a limit to the supply of ice cream. Same thing.
I referred to conservation as being equivalent to an increase in supply (all other things being equal) for everyone else. A real economist would probably want to put conservation on the
demand curve, not the supply curve. Since I'm merely an amateur, I don't have to worry about that. In my Macro textbook, the shifting curves are parallel to each other (supply with supply and demand with demand). Demand has to shift as far to the left as supply did to reduce the price to its original level.
I'm looking over a couple of external references and noticing that Jevons doesn't really apply to conservation, a reduction in a subset of consumers' demand. Rather, it refers to efficiency in a particular application of a resource. Jevons says that greater efficiency does not reduce overall demand. Average MPG is higher but there are more cars on the road. The Jevons paradox is a good thing inasmuch as it promotes development of alternative energy. Greater efficiency increases our resilience and reduces energy intensity, making PO hurt less.
Here are my external resources, they're
Engineer-Poet and
Wikipedia.