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Prompt Suppose that you are asked to partake in a redo of the famous Ehrlich-Simon bet (see this week's lecture "Nonrenewable Resources II: Part 2"), starting from Friday of this week

Management Oct 29, 2020

Prompt

Suppose that you are asked to partake in a redo of the famous Ehrlich-Simon bet (see this week's lecture "Nonrenewable Resources II: Part 2"), starting from Friday of this week. You must choose one side of the bet, the wager is adjusted for inflation (assume that you have the funds to participate), and the time horizon is the same (starting from this Friday). Which side of the bet would you choose? How did you decide?

Posting Instructions

  • Make your first post no later than Friday of this week. Make your selection responding to the question, and then provide a brief explanation of your decision process.
  • Reply with a comment or question to at least two other participants in the discussion no later than Sunday of this week. For example, you could ask your discussion partners about their rationale, or compare or contrast their response and reasoning with your own.

Grading Criteria

For this discussion, you get full points if you do the following:

  • Make your initial post by Friday of this week (13 points)
  • Reply to at least two peers by Sunday of this week (12 points)

Expert Solution

I would choose Simon's side of the bet. The basic economic principles that led to his win are still valid today. Continued consumption of a finite resource doesn't necessarily lead to higher prices. Demand can decrease for many reasons, and supply can increase with the discovery of new reserves or extraction technology.

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