In any economic system, people must decide what to produce, how to produce it, when to produce it, and who will get it. This lesson looks at the "when" question. In particular, if society has only a finite amount of some resource, when should that resource be used -- today, tomorrow, or not at all? This problem is sometimes called the "cake-eating" problem: given a cake (with good preservatives!), what is the best way to eat it? All at once? A little each day? or by some other pattern of consumption? In this lesson students learn how people making decisions in the market for a nonrenewable resource decide when the resource will be used. After reviewing the news around Clinton's Africa visit and his focus on environmental issues in Botswana, they are introduced to the "when" question with a spring holiday variation of the 'cake-eating' problem. The snacks described in the problem are then used to demonstrate how a market for a nonrenewable resource works.

KEY CONCEPTS

Natural Resources

STUDENTS WILL

  • Describe the characteristics and give examples of nonrenewable resources.
  • Consider the economic question of "when" a resource should be used.

INTRODUCTION

In any economic system, people must decide what to produce, how to produce it, when to produce it, and who will get it. This lesson looks at the "when" question. In particular, if society has only a finite amount of some resource, when should that resource be used -- today, tomorrow, or not at all? This problem is sometimes called the "cake-eating" problem: given a cake (with good preservatives!), what is the best way to eat it? All at once? A little each day? or by some other pattern of consumption? In this lesson students learn how people making decisions in the market for a nonrenewable resource decide when the resource will be used.

After reviewing the news around Clinton's Africa visit and his focus on environmental issues in Botswana, they are introduced to the "when" question with a spring holiday variation of the 'cake-eating' problem. The snacks described in the problem are then used to demonstrate how a market for a nonrenewable resource works.

Materials (Optional): One small packet of nutritious snack food for each student.

RESOURCES


PROCESS

Read about Clinton's Africa visit and his remarks on environmental policy:
The Clinton Administration Record in Sub-Saharan Africa

CNN - A Bridge to Africa:
Botswana, Boxed in by Ivory Ban, Seeks to Carve a Way Out

Spring Holiday Treats.

1. Clark has just returned from a successful Easter egg hunt. He has collected nearly 200 spring treats: jelly bird eggs, marshmallow peeps, mellowcremes, and foil-wrapped chocolate eggs. Each of the treats is well-packaged and should last a long time. Clark's mom, in a moment of parental carelessness, tells Clark that he may eat his treats whenever he wants. How do you think Clark should eat his treats over time? Discuss. What are the criteria for each suggestion? Should he get the best value over time for consumption of his treats? Should he save some for later, since a treat might be worth more to him then? What incentives could be used to encourage Clark to save some of his treats rather than eat them?

2. How are Clark's treats like nonrenewable resources? What amount of treats are available? How much will be available in the future if he consumes much of them now? What are the short-term consequences of Clark consuming all of his treats in the next two weeks? What are the long-term consequences? What he saved all of them for later? What would be his short-term consequence?

3. How are his treats different from nonrenewable resources? How quickly and easily can the treats be produced vs. a redwood tree, oil, or a white rhino?

4. Provide some examples of nonrenewable resources.

5. How should nonrenewable resources be used over time? Would your ideas about how Clark should consume his holiday treats change if you knew that they couldn't be produced any more?

6.In 1978, the U.S. Federal Government said proven oil reserves were 648 billion barrels - enough to last for 29 years. In the following 14 years, nearly 84 billion were used, but proven oil reserves increased to an estimated 999 billion barrels. Explain how a non-renewable resource can keep increasing.

7. If you were to write a letter in support of environmental policy in Africa, what would you say?

*Adapted from Anderson, Curt. "Halloween Treats and Nonrenewable Resources", Economics and the Environment, Copyright 1996. National Council on Economic Education, 1140 Avenue of the Americas, New York, NY 10036.

EDUCATOR REVIEWS