What are some micro/macro economic issues related to non renewable and renewable resources? Please provide 3 economic issues for each.

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pohnpei397 | College Teacher | (Level 3) Distinguished Educator

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In order to answer this question, we must first understand the difference between macroeconomics and microeconomics.  Microeconomics is concerned with economics on a relatively small scale.  This could be a scale as small as one household or one company.  It could also look at the economics of a whole industry.  So, any questions that have to do with economics at that level are part of microeconomics.  By contrast, macroeconomic questions have to do with entire economies.  A question is macroeconomic if it is asking about how a whole nation’s economy will be impacted by various things.  With this in mind, let us look at issues having to do with renewable and non-renewable resources.

With microeconomics, it is simple to come up with three issues.  This is because we could simply ask the same question about three different types of resources or even three different companies that are dealing in those resources.  For example, we could ask “what will happen to the price of coal (a non-renewable resource) as fracking becomes more common?”  We could also ask “what will happen to the price of natural gas as fracking becomes more common?”  (For both of these, we could also ask what would happen to the quantity of those resources that would be used.) Finally, we could ask what would happen to the amount of energy that families consume if the government imposes a carbon tax.

The macroeconomic side of this question is a little bit harder since every issue would have to relate to the economy of an entire country.  However, it is still not too hard to find ways to ask such questions.  For example, we can ask “what would happen to the economy (would GDP rise or fall, for instance) of Japan if it started to use nuclear energy again?”  We could also ask “how will overall employment levels in the United States be affected if the government requires the use of more renewable resources such as wind power?”  Finally, we could ask what would happen to overall price levels in the economy (would there be inflation, for example) if a carbon tax is imposed on the use of non-renewable fossil fuels.

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