Elasticity of Nonrenewable Resources

[gumbiegirl]

I can't get over this.

The quantity of land and other renewable natural resources is fixed and their supply is perfectly inelastic. On the other hand, the flow supply of a nonrenewable natural resource (e.g., oil) is perfectly elastic.

1. How the heck is land a renewable resource?
2. How is oil supply elastic? Isn't there a limited supply?

I must be missing something...

 

[mcf]

It's a tricky concept that keeps coming up.

Land doesn't get used up. It's always there. My using it doesn't prevent someone else from using it in the future.

Oil/gold/etc are elastic supply because of the extraction process. Unlike a waterfall where you cannot stop the flow of supply, the firms the extract gold and oil can limit the supply as they see fit..

I believe this is the correct logic.